Tuesday, August 30, 2005

CBIA Says Demand Still High

The California Building Industry Association released it's July housing starts numbers today, which indicated a 2.6-percent increase in construction for the Los Angeles metropolitan area over the same month last year. From the CBIA press release:
SACRAMENTO - Housing starts remained strong in July, increasing the chances that California will have another strong production year, the California Building Industry reported today. But CBIA officials added that even today's construction level is not enough to quench Californians' thirst for new homes and apartments.

While total residential building, measured by building permits issued in July, was down 16.4 percent from June, going from 21,385 units to a total of 17,875 units in July, housing starts were up by a robust 8.2 percent compared to July 2004. Alan Nevin, CBIA's Chief Economist, said it appears production will be on par with last year's levels, but warned that current policies makes it difficult to build affordable housing.

"There remains a major part of the market that cannot be satisfied with ownership housing," Nevin said. "Restrictions on multifamily zoning, unduly high development fees and other governmental interferences in the construction process add to the cost, making it difficult to build affordable homes."

According to figures compiled by the Construction Industry Research Board, single-family home production dipped 17.1 percent from June to 13,658 starts in July, but that figure was 8.9 percent ahead of July 2004. Multifamily housing starts were at 4,217 units, down 14.2 percent from June but up 5.8 percent compared to last July.

— The Boy in the Big Housing Bubble