June was another strong month for new-home production across California, with the number of housing permits issued for single-family and multifamily homes growing substantially over June of 2003, the California Building Industry Association announced Monday.

Measured by building permits issued, the number of new single-family homes in California climbed by 14.3 percent in June compared to the same month a year ago for a total of 14,186. The more volatile multifamily market recorded 5,655 new permits in June, a solid 43.1 percent increase over June 2003. In all, there were 19,841 permits issued in June, 21.3 percent more than were issued the previous year.

Permits also increased compared to May 2004, with single-family permits up 2.5 percent and total permits rising by 12.2 percent.

At the mid-year mark, all housing permits issued in 2004 totaled 104,502, keeping pace with CBIA Chief Economist Alan Nevin’s view that the state will likely break through the 200,000-unit level by year-end. If so, it would be the first time that production has reached that level since 1989.

“The California new-home market continues to excel,” Nevin said. “In the first half of 2004, units permitted are almost 10 percent ahead of last year at this time. In fact, California’s housing production accounts for one of every 10 residential units permitted in the nation. But even that’s still not enough.

“Traditionally in the United States, there are 3.5 to 4 resale housing units sold for every one new unit built. In California, that ratio is close to 6-to-1 because of the inability of developers to produce homes in line with demand.”

CBIA President Sherman D. Harmer Jr., a San Diego home builder, noted that the current level of production won’t be enough to bring the supply of housing back into line with the need for a place to live.

“Even a strong production year like this one does nothing to begin whittling away at the overall housing deficit this state faces,” Harmer said. “Until that deficit is reduced, demand will continue outpacing supply, putting more and more pressure on the prices of new and existing homes.”

The California Building Industry Association is a statewide trade association representing more than 6,000 businesses – home builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals.


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