Foreclosed Houses for Sale Cut Georgia City’s Construction

In the Georgia city of Villa Rica, the home construction industry has positioned to a full stop as foreclosed houses for sale in the area pushed down prices and wiped out expected profits in the home building sector.

In Carroll County, where one side of Villa Rica is located, building officials are stunned about the lack of applications of building permits or even permits to just renovate or make some home repairs.

Since the start of the year, only 12 new building-related permits were issued, and most of them were permits sought by banks for the maintenance of their foreclosed houses for sale in the city.

James Moran, the city’s building inspector, said that in the past years, construction noise was a normal sound heard by all residents across the city. He said that the noise has sadly gone away, leaving many construction workers without jobs.

Similarly in Douglas County, where the other side of Villa Rica City is located, there has been no new building-related permit issued from January to June.

According to city administrator Larry Wood, the lack of home construction, home renovation or home repair has cut down the revenues of the city significantly. He said general revenues have been cut down by almost 10 percent. Revenue from building permits and other construction-related permits reached only $5,628 in the first quarter of the year.

The situation of Villa Rica City is not isolated. Across the country, cities are struggling from substantially reduced revenues as home values, tax assessments and construction-related fees go down.

According to Taurus Freeman, community development director of the city, he has talked with the city’s developers about their development plans in the coming year so he can make the city’s fiscal year projections. He said most of them had no immediate plans, but there were a few who were still building and some who were pursuing some commercial development projects.

Many home builders have been pointing to the glut of foreclosed houses for sale as the major reason for their failure to sell new homes and their failure to find home construction projects. They said they can never compete with the excessively low prices of foreclosed houses for sale.

However, just like City Officer Freeman, the homebuilders are hopeful that once the inventories of foreclosed houses for sale are reduced and the economy recovers, they can also begin to recover and begin building homes again.