California’s home builders will likely begin construction on as many homes and apartments in 2005 as they did in 2004, but will still fall nearly 40,000 units short of the amount of new housing that is needed to meet continued strong demand, according to a housing forecast released today by the California Building Industry Association.

The forecast, authored by CBIA Chief Economist Alan Nevin, projects that California will see a total of 210,000 housing starts in 2005, equaling 2004’s production numbers. Last year was the first year since 1989 in which construction began on more than 200,000 new homes and apartments.

“Impressive as these numbers are, it should be remembered that California’s home builders are still not meeting the state’s housing need. Nearly 250,000 homes and apartments are needed each year to accommodate the state’s growing population,” Nevin said, adding that in the late 1980s, an average of 255,000 housing units were permitted statewide each year.

Nevin expects that permits will be issued for 155,000 single-family homes, matching the units produced in 2004. He also said prices of single-family product should increase 4 percent to 5 percent on average statewide.

On the multifamily side, he forecast that 55,000 apartments and condominiums will be built, adding that the split between the two can’t be determined because many projects originally permitted as rentals convert to condominiums prior to completion.

The forecast excludes apartment-to-condo conversions since conversions do not add to the overall housing supply.

The report also includes analyses for the state’s major metropolitan areas. Nevin said most regions will see similar new-housing construction levels as in 2004, with the Inland Empire, Los Angeles County, and the Sacramento-San Joaquin Valley areas having the highest production levels.

The California Building Industry Association is a statewide trade association representing more than 6,000 industry professionals.

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Black Friday starts now! We've got great deals on Inman Connect New York in-person and virtual tickets. Register now×
Cyber Week Sale: Get 1 year of Inman Select for $75.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription