Bank Owned Homes for Sale Expected to Influence Subdivision Project

by on Foreclosures

The number of foreclosed properties and bank owned homes for sale has remained high in Michigan. This led some analysts to question whether it is wise to build new subdivisions now when the state is currently sitting on a huge excess of property inventory. The debate was recently reignited by reports that the Smith Village project in Flint, started around 13 years ago, will be restarted this year.

According to some housing industry analysts, there are too many Detroit foreclosures for sale and unsold residential properties in various areas of the state that building new ones will be unreasonable. Based on housing reports, Flint is said to be in possession of a surplus of around 27,000 housing units. Some realtors have argued that the last thing the region needs are more residential properties.

Local analysts have also argued that newly built houses are finding it hard to compete with cheaper foreclosed homes for sale in Michigan and that other counties have even put their residential development projects on hold. Those who oppose the project also stated that even if the Village is completed, there will not be enough people with means who can purchase the finished properties.

Meanwhile, those who support the completion of the project have argued that there will be buyers who will opt for newly built houses rather than bank owned homes for sale, particularly since the development is predicted to be the only subdivision that will be built in the area in 2011. Funds from a federal grant will reportedly be used to construct more than 80 housing units at the subdivision this year.

The people behind the project have stated that half of the houses in the subdivision will be sold to buyers who belong to the low income bracket and who are mostly unable to afford traditional homes and even bank foreclosed properties. They also noted a Downtown Development Authority report which showed that Flint is currently in need of around 250 residential units in its downtown neighborhood, which means that there will be a market for the new houses.

In response, critics have asserted that the factors that stalled the completion of the subdivision more than a decade ago still exist and have become even worse. They added that the recession, job losses and the huge amount of bank owned homes for sale will only result in the finished houses sitting empty in their lots for a long period of time.