Foreclosures Are Changing Housing Patterns and Trends

Posted on January 21, 2009
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The economic slump kicked off by foreclosures is changing the housing patterns and trends in development. There is a shift in values.

The Atlanta White House – a grand mini replica of the original White House replete with Oval office and Lincoln bedroom, symbolizes the previous mood of architecture. As a result during the boom days the developers changed the urban landscape by pulling down modest constructions like ranches and bungalows replacing them with mansions. To build the mini White House three brick ranches had to razed. Today this mansion is now being repossessed upon. The owner cannot get the selling price of $9.88 million he wants.

Today foreclosures have brought down the curtain to that era to meet the actual requirements of the many. Simultaneously there is also a growing demand to balance the old with new demands. Adrian Fine of National Trust for Historic Preservation in Washington said, “We’re advising communities to take advantage of this slowdown and use it as a cooling-off period. It gives them a little more time to have a less heated and less controversial discussion to protect a specific neighborhood and balance that with the need for growth and development.”

House prices have dropped by 20% in 20 cities across the country in 2008. The price of houses is the lowest since 26 years and this has caused the busy bulldozers to take a pause. In Westport, Connecticut, the permission for tearing down has fallen by 33%. It reflects the national scenario with local variations of course. Analysts say that this trend will continue for another five years if not a decade.

The razing of houses has not stopped fully however. The idea that by pulling down an old house one can make a lot of money no longer dominates. But some are taking advantage of the slump in the real estate to pull down houses in strategically located areas to make way for affordable houses – something that is in great demand.

Karl Case of Wellesley College in Massachusetts said about teardowns that these “are big in upscale markets (where) they haven’t fallen nearly as much. The real declines have been in the bottom tiers of the Sunbelt”

Two years previously 300 “endangered” localities in 33 states had been listed by the National Trust. It later expanded it to 500 regions in 40 states. There are two contributory factors for this trend – people living in the suburbs are returning to the cities and value of urban land rising in comparison to value of houses.

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