New Housing Developments

Last year, sales of new residential properties hit an virtually record low in some areas of Texas. According to analysts, the massive supplies of bank and government foreclosure residences are component of the reason for the poor sales performance of new dwellings in 2010.

Analysts stated that foreclosed homes for sale in Lubbock, TX, and in the rest of the state are competing against new houses in a time when homebuyers and residential property investors are almost non-existent. This is apparent in areas like the Waco-McLennan County, where 2010 marked the second worst performance year for new house sales, second only to the 1959 level. The decline in the sales of new dwellings in the county was estimated to be at the range of 50 to 60% last year.

Economists stated that, with Texas foreclosed homes for sale continuing to rise, more home builders are becoming put out of company and, consequently, far more jobs are lost to the region. They stated that, as sales of new houses decline, less residence creating projects are completed and far more individuals lose their jobs. The trend affects several sectors linked with the residential property market, which includes home builders, contractors, and suppliers of construction supplies.

Furthermore, the little number of buyers willing to brave the homeownership market will more likely buy cheaper residences, such as bank and government foreclosure properties. Their fear of losing their jobs and not becoming able to meet their monthly loan obligations are turning them away from new houses that are typically priced greater than foreclosures, analysts have added.

The impact is significantly felt amongst up-scale subdivisions where luxury houses and greater-end dwellings stay unsold for months, with forclosed homes grabbing the attention of the limited number of prospective buyers and actual estate investors. To be able to cope with the existing market condition, most home builders are turning their backs on luxury dwellings and are focusing a lot more on creating low-scale residences.

According to house builders, this will not give them a lot of returns, particularly because they are also forced to compete with lower priced bank and government foreclosure properties. However, they stated that it is better than creating high-end residences that no 1 would purchase anyway.