Homebuilders Thriving Amid Bank and Fannie Mae Homes for Sale

by on Foreclosures

The presence of low-priced bank foreclosed houses and Fannie Mae homes for sale translates to lower residential prices and a downturn in home building activities in most U.S. markets. In Alabama however, the coastal home construction market is thriving despite competition from low-priced distressed properties.

The rise in the number of foreclosure homes in Birmingham and in the rest of the state prompted majority of homebuilders to scale back housing projects. In some coastal areas and several Mobile communities however, house builders reported that they were able to find niche markets. Most of them reported being busier during the first quarter of 2011 than the whole 2010. They claimed that a growing consumer confidence, job openings at the steel mill ThyssenKrupp and shipbuilding firm Austal USA and increased number of cash buyers have contributed to boosting the home construction market in these areas.

Although there are low-priced home foreclosures in Alabama to compete with Mobile homebuilders, a lot of people in the region are reportedly favoring newly built houses. Homebuilders have revealed that most of the buyers are families moving to the region because of job opportunities, while others are retirees or move-up purchasers. They also believe that the stabilizing economy has a lot to do with people's confidence when it comes to buying new homes.

The high level of activity in the Mobile new home market is considered unusual, particularly at this time when very few buyers are in the market and a big percentage of these few buyers are opting to purchase cheap bank foreclosed houses and Fannie Mae homes for sale. Housing starts in the Alabama region also go against the national trend, with nationwide February housing starts for single family dwellings going down by 11.8% in February of this year compared with the previous month.

The U.S. Commerce Department also reported that new home permits in the whole country have fallen by 8.2% over the same period. Housing data also showed that a huge percentage of closed sales accomplished during the first months of the year had been accounted for by bank foreclosures for sale and distressed property sales. In Mobile and in some other Alabama coastal housing markets, a bigger share of sales are coming from newly-built dwellings.

Homebuilders believe that distressed houses and Fannie Mae homes for sale will continue to account for a large percentage of housing sales in the coming months. However, they also stated that areas with job opportunities, like Mobile, will have a healthier new home market than others.