Florida Builders Buy Land On Bank Foreclosure Sales

Major builders are expanding into Southwest Florida by buying land on bank foreclosure sales

. Homebuilders such as KB Homes, D.R. Horton, Lennar and Pulte are investing a total amount of $7.5 billion to purchase cheap land.

Industry experts said that the move of these builders gave them an edge that can last them several years over their competitors. Fort Worth, Texas-based builder D.R. Horton Inc. has announced its expansion into the southwest area of Florida.

Currently, the builder has seven active home communities located in Tampa Bay area. Similarly, Bloomfield Hills, Michigan-based Pulte has been negotiating to buy land in several areas in Sarasota County.

Meanwhile, several regional builders are experiencing some market improvements. However, they have already reduced their workforce and financial foundations. The collapse of the housing market forced many regional builders to close their businesses or stave off banks from foreclosing on their lands which they purchased during the peak of the housing market.

Industry experts said that because of the collapse of the housing market, many regional builders today are having difficulty getting back the same share of business they enjoyed before the economic downturn. They said that only the strong will survive in the current market, adding that the great number of builders was a result of overbuilding and easy financing.

Experts also said that once in a while, there will be small builders who will able to make it back on the top of the market. But the market is expected to be dominated by large builders who have the capital to build new houses.

Many small builders need new sales and financing to sustain their operations, and in some cases, fend off bank foreclosures sales, according to experts.

Since 2006, about 160,000 jobs were lost in the construction industry in Florida. Industry experts said that aside from the economic downturn and housing market collapse, small builders are also facing stiff competition from large builders.

The merger of Centex and Pulte resulted to the largest home building company in the country, controlling 80 communities in the state alone and holding cash capital amounting to $3 billion.

Small builders do not have the luxury of merging because of lack of financial strength, resulting to some of them facing bank foreclosures sales.

by: Joseph Smith

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