Overbuilding in Washington Leads to Cheap House in Foreclosure
The growing number of cheap house in foreclosure in Bonney Lake, Washington has affected many construction projects in the area. Industry experts said that overbuilding in the city has led to many empty and foreclosed homes.
One notable project that has been affected by foreclosure is the gated community Bohemian Estates, a Lake Tapps 49 luxury homes by builder Ludvik Stribrny. The development barely started when it was slowed down due to foreclosures.
Foreclosures have been spreading across the city and its surrounding areas. It is a common sight to see abandoned and vacant houses around the area. Industry experts in Pierce County said that many builders have constructed upper-end houses in Bonney Lake because that is where good land is.
They said that like other cities across the country, overbuilding is a major factor that contributed to the foreclosure crisis in Bonney Lake. They said that during the peak of the housing market, many buyers could avail of double loans and interest free financing. This set-up encouraged people to buy houses even if they could not afford to pay them. And when the market collapsed, cheap house in foreclosure surged.
Market data showed that Pierce County posted 543 new foreclosures last August. Data also showed that 45 percent of houses on the real estate market in Bonney Lake are foreclosures, with 121 in short sells and 87 are bank-owned properties.
Industry experts said that the situation in the city is bad right now and is expected to get worse before it shows any improvement.
City officials have mapped out the repossessed houses in the city after they received reports of the grim situation in the housing market. They said that there were many foreclosures in the area but not all are located within the city limits.
Meanwhile, other developers are still hopeful that the real estate market in the city will recover soon. And sellers are trying to adjust to the market situation by lowering the asking prices for their properties.
The current trend showed that the foreclosure problem does not just affect builders but the cities as well. A local government can spend as much as $34,000 to conduct inspection on one cheap house in foreclosure. And it can pull down equity and value for nearby houses by as much as $220,000.




