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Small Houses for Sale being Built due to Hard times
10/22/2010

Reports revealed that due to construction costs, Michigan home builders are finding it hard to sell higher-end houses. As a result, they have been constructing smaller and less expensive houses.

CEO Robert Filka of the Michigan Association of Home Builders, a trade group in Lansing, stated that the two-year trend is starting to hit the houses and it has become especially difficult for the once lucrative $200,000-plus market. As a consequence of this, builders are found to often unload houses at a loss just to clear inventory as they bolster their renovation business.

This means that home buyers are in for a bargain but that is only when they are able to sell their current houses first without taking a bath financially to secure financing for the new one. This is lose-lose solution for both parties are house owners are also facing the same problem. Home appraisal values are dipping with the housing starts and sales prices.

There are different factors that are said to have influenced the latest development. One of these is the swings in home appraisals. They say that this is also due to the lending freeze and the rising foreclosure rates. Filka stated that its effects are clear and visible. It is slowing recovery of new construction and that the confidence is beginning to wane.

Owner of Gerich Cos. in Plymouth, Daid Gerish was said to have showed off a home in Brownstone Township recently. The house’s cost was close to $250,000 prior to the market crash but he was able to sell it at a loss for only about $175,000.

While the current state figures are not available, there is a 55 per cent of new homes in the nine-county state in the Michigan region which were listed to be less than $200,000 all through July. This is the most current statistics available according to Housing Consultants Inc., a Calrkson firm which does the tracking of new building permits.

As an attempt to stay afloat, home builders now resort to home remodeling. In time, they are hoping that this crisis will pass.

 


 

 

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