New Home Sector Gaining on Bank and HUD Home Auction Market
Properties offered at HUD home auction and foreclosure sales are available at almost half their original prices, which effectively pushed new houses out of the property-selling market. In Alabama however, the homebuilding sector is starting to gain traction, with activities picking up during the early part of the year. Data for February 2011 showed that home construction activities have risen in the region.
Mobile home auctions and Birmingham foreclosure sales are still dominating the market, but homebuilders are gaining confidence as evident in the increased number of new home projects in these areas. A report from the Alabama Center for Real Estate revealed that Birmingham filed 120 homebuilding permits for single family houses during February, representing a jump of 9.1% compared with the previous month.
The report also showed that statewide home construction activities also improved even with cheap properties available by the thousands at foreclosure auctions in Alabama. For the second month of 2011, a total of 659 home construction permits were issued statewide, representing an increase of 20.5% compared with January 2011. It also marked the first home construction activity increase for the state after 10 months of non-stop declines. In addition, the supply of new homes in Alabama has gone down in February to 2,400 new dwellings.
The total represents a 21% decrease from February 2010 and could mean that more people are buying new houses instead of properties at bank and HUD home auction. Despite the month-over-month increase in home building activities in Birmingham and the whole state of Alabama, analysts claimed that the new home market still has a long way to go before it recovers. They cited the lack of year-over-year improvement as basis for this declaration.
Analysts asserted that properties in foreclosure auction are still ahead of new houses, although the gap seemed to be diminishing. February figures showed that home construction activities in Birmingham were still 27% lower than February 2010 activities, based on the number of construction permits issued during the period. For the whole state, house construction permits in February of this year remained lower than one year ago by 16%. Housing analysts expect the gap to continue to narrow, though.
According to them, residential sales at bank and HUD home auction will continue to account for a huge percentage of residential transactions in Alabama for the rest of 2011. However, they also expect homebuilding activities to improve further in the coming months as more homebuyers enter the market for the spring home buying season.
Related Posts:
- Government Homes for Sale Weighed Down New Homes
- Sales of Residential Tax Lien Foreclosures and Other Homes Fell
- Foreclosure Auction Numbers Signal Housing Market Stability
- More Buyers of Homes at Property Auction List As Population Grows
- High Levels of Foreclosures and Bankruptcy Homes Hit Housing Starts
