Despite a large decline in housing starts during August, due in part to a fee increase in Riverside County, housing construction is expected to remain bullish for the remainder of 2005 and into 2006, the California Building Industry Association reported.

CBIA Chief Executive Officer Robert Rivinius said that was good news for the economy but the numbers still portend bad news for prospective home buyers because it means the supply of new homes and apartments will continue to fall short of the demand.

A total of 16,522 building permits were issued in August statewide, down 11.1 percent compared to July and down 10.6 percent from August 2004, according to figures compiled by the Burbank-based Construction Industry Research Board.

Single-family housing starts in August totaled 12,850, down 8.5 percent from July and down 4.6 percent compared to August 2004. CIRB said the biggest factor in the drop-off in single-family construction was a fee increase in Riverside County – the state’s leading growth area – that took effect Aug. 1. Many builders obtained their permits in July to avoid paying the higher fees, which are typically passed along to new-home buyers.

Multifamily starts totaled 3,672, down 19.1 percent from July and down 26.8 percent from August 2004. Multifamily construction tends to be much more volatile than single-family starts.

The California Building Industry Association is a statewide trade association representing more than 6,400 businesses comprised of home builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. 


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