New Home Market Rebounding Amid Bank and HUD Foreclosures

Although the level of bank and HUD foreclosures have remained elevated in most areas of Georgia, the new home industry seemed to be on a rebound in some markets. Certain locales of the state are posting higher number of housing starts and increased number of permits for home construction projects.

Despite tough competition posed by low-priced Atlanta foreclosure homes and cheap distressed houses in various areas of Georgia, new housing markets in regions like Cherokee County are able to push forward with construction projects. In March of this year, Cherokee issued a total of 37 building permits for single family dwellings, up from the 25 total posted in February 2011. However, the figure did represent a year-over-year decline from March 2010 when 66 permits were issued for similar types of construction projects.

A lot of buyers still find Georgia foreclosure homes better deals than new houses or non-foreclosed residences, but residential construction seemed to be looking up in certain areas of the region. Cherokee County is one of these areas if month-over-month data is to be used as basis. However, year-over-year permit numbers are still in decline, although analysts believe that this is to be expected since last year's figures were aided by the federal government's tax credit initiative.

Permits for the first three months of 2011 totaled 96, down from the 144 recorded the year before. Realtors though, are optimistic that housing starts will flourish in the coming months as the home buying season hits its peak. They did admit however, that the continuous flood of short sales and bank and HUD foreclosures is preventing the new housing market and the whole residential property industry from recovering faster.

They also stated that the tight lending market is not helping the sector at all, with buyers unable to purchase even bargain foreclosure homes due to difficulties in securing financing. Local realtors revealed that a huge number of county residents  are willing to purchase homes but are unable to do so because of lack of financing, with majority of them opting for remodeling or renovation options instead. One positive development that local realtors are seeing though is the rise in the number of older homeowners in the area.

According to real property agents, the number of homebuyers aged 55 and above will increase further in the coming months as more members of the Baby Boomer generation retire and decide to purchase bank and HUD foreclosures and even newly-built homes.