The California Building Industry Association reported a 46.8 percent statewide drop in building permits issued for new single-family homes in October compared to the same month last year, and permits for the first 10 months of the year are down 30 percent compared to the same period last year.
Meanwhile, permits for multifamily units increased 28.4 percent in October compared to the same month last year, and were up 6 percent for the first 10 months of the year, the association also reported.
In all, there were 10,520 building permits issued for new single-family and multifamily housing units in October, which is 10.7 percent lower than September and 29 percent lower than October 2005. Total new building permits issued for the first 10 months of the year dropped 21 percent compared to the same period last year.
Alan Nevin, CBIA chief economist, said in a statement that new-home construction in California is expected to continue cooling off for the rest of the year, and he predicts a total of about 170,000 permits for the year.
“The primary decline is in the single-family sector, where half of the decline is in the Riverside-San Bernardino, Sacramento and San Diego areas. On the multifamily side, we are now 6 percent ahead of last year’s 10-month statistics. Much of that multifamily activity relates to higher-density projects in the major metropolitan areas of the state,” he stated.
Nevin said he expects multifamily construction to remain strong in most markets and projects that multifamily construction this year will total between 45,000-55,000 units while single-family starts are expected to drop to between 125,000-135,000 compared with nearly 155,000 in 2005.
Total production this year is expected to be the sixth highest since 1989.
Robert Rivinius, CBIA president and CEO, said that builders will likely continue to reduce their standing inventory of unsold homes that are under construction or completed.
He noted that California is the second least affordable state in the nation, “with a limited supply of land and very high costs of government regulation and impact fees.”
The building association represents about 6,700 businesses in the state, including builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals.