California housing starts climb in March

Largest gains seen in Southern California
Inman News
Home builders shook off the effects of record rainfall earlier in the year to post sharp month-over-month increases in housing starts in March, the California Building Industry Association reported.

New housing units as measured by permits issued in March totaled 19,157, up a resounding 33.3 percent from a rain-soaked February and down a slight 2.4 percent from March 2004. Of that total, 14,136 were single-family units (up 35.2 percent from February) and 5,021 were multifamily dwellings (up 28.1 percent).

During the first quarter of 2005, 16 of the state's 28 metropolitan areas posted gains in single-family housing starts, while 15 have posted gains in multifamily units. The San Jose-Sunnyvale-Santa Clara Metro Area, which posted the largest decline in starts in 2004, has rebounded nicely, posting the largest increase in the first three months of 2005. One area showing a significant decline so far has been the Sacramento region, which local building officials attributed to both the weather and delays in processing two large master-planned communities.

Despite the fact that California's housing production is rebounding and is expected to exceed 200,000 new homes and apartments for the second year in a row, home builders still aren't keeping up with continued high demand from the state's growing population, said CBIA President Steve Doyle, a San Diego home builder.

"With interest rates still near their historic lows and demand remaining high due to continued population growth, we expect this year's production to come in right around last year's level." Doyle said. "But even the 210,000 new homes and apartments built last year – the most produced since 1989 – is still not enough.

"The State Legislature needs to take action this year to ensure that land is available for new homes and apartments and that home builders aren't handcuffed by unnecessary and redundant regulations that prevent us from keeping up with demand. Because the bottom line is that housing affordability begins with housing availability, and it's the lack of availability that has contributed to sky-high prices and the diminishing opportunity for Californians to realize the dream of home ownership."

The California Building Industry Association is a statewide trade association representing more than 6,200 businesses involved in home construction.