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People Who Purchase Foreclosures for Sale Get Other Options

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By : John Cutts    99 or more times read
The number of people who purchase foreclosures for sale inched higher last year as foreclosed property sales rose in majority of U.S. markets. However, these homebuyers are likely to get more alternatives this year as construction of new homes picked up in January.

A big number of homebuyers opted for foreclosed or repossessed homes last year as shown by the rise in distressed property sales in most regions of the country. Distressed and repossessed properties are far cheaper than new homes and, with record unemployment rates and an ongoing weakness in the national economy, it is not surprising that those who have the capacity to buy went for lower priced dwellings.

Because a distressed house for sale is more affordable than a new house, most buyers went for the former, resulting in fewer activities in the home construction market as builders find it difficult to compete with distressed properties. However, 2011 seemed to be starting right for the new home industry as housing starts recorded an increase in January. According to nationwide housing reports, residential construction activity last month was the highest recorded in the U.S. in the past 20 months.

Even though more people are still expected to purchase foreclosures for sale this year, home builders escalated activities last month as 596,000 new housing units and apartments broke ground in January. The total, which has been seasonally adjusted, represented a 14.6% increase compared with December 2010.

In 2010, a total of 587,600 new residences were worked on by home builders. The figure was just slightly better than the 2009 total of 554,000. The almost flat activity was not surprising, given that foreclosures at auctions were highly preferred by majority of buyers and investors in 2010. Although housing starts improved last month, analysts cautioned that the housing market is still far from a recovery as the total is still way below the number traditionally seen during normal industry conditions.

According to them, under normal market conditions, home builders usually build around one million new houses every year. They also stated that even with increased number of new houses to choose from, a big number of buyers will still purchase foreclosures for sale this year because of their low prices.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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