The economist for a building industry group in California reports that his “crystal ball has a slightly more optimistic scenario” for 2008 than many other forecasts, and he predicts “a modest turnaround” in the state’s housing market next year.

That admittedly contrarian view by Alan Nevin, chief economist for the California Building Industry Association, includes an anticipated 15.3 percent increase in single-family housing permits this year compared to 2007.

The state’s economy “will have a soft landing in 2008 and begin its return to normalcy by mid-2008,” Nevin’s 2008 forecast report states, with job gains in the 210,000-246,000 range. Anticipated population growth is a factor in the anticipated upturn. “The population this year will grow by more than 400,000 persons,” the report states, and “population equals consumption.”

Single-family permits fell 34.4 percent in 2007 from 2006, with 70,850 single-family permits in 2007. And Nevin’s forecast calls for single-family permits to rise to 81,700 in 2008.

Multifamily permits, meanwhile, are expected to rise 2.9 percent, from 45,400 in 2007 to 46,700 in 2008.

Nevin’s forecast also calls for single-family building permits to grow in markets across the state in 2008 compared to 2007, with permits rising 21.2 percent in the Southern California region, 13.3 percent in the San Joaquin Valley region, 11.1 percent in the San Francisco Bay Area region, and 6.7 percent in the Sacramento Valley region.

Multifamily building permits are projected to drop from 1,500 in 2007 to 1,000 this year in the Central Coast region, fall from 1,300 to 1,200 in the Sacramento Valley area, and drop from 4,000 to 3,000 in the San Joaquin Valley region while rising in other regions, according to the forecast report.

The election year “means that the party in office at the White House will do as much as humanly possible to generate economic strength in order to retain the presidency and pick up Congressional seats,” according to Nevin’s forecast, and the weak U.S. dollar has led to an exporting boom while “the gross domestic product continues to expand at a rate that is within the range of normalcy.”

The Anderson Forecast, an economic report released last month by economists at the University of California, Los Angeles, predicted that California and the nation may be able to avoid a recession, though the “combination of real estate weakness, government belt-tightening and Hollywood labor disputes” in the state will create a sluggish economy.

Some other economists have been far less optimistic about the chances of avoiding a nationwide recession, and the chief economist for the National Association of Home Builders said last month that the probability of a recession has “increased fairly significantly” and he estimates a 40 percent chance that the economy will sink into recession within the next six months.

According to a report released by the California Building Industry Association last month, housing starts dropped 44.6 percent statewide in November compared to the same month last year, while housing starts for the January-November period fell 31.5 percent compared to the same period last year.

Also, the California Association of Realtors reported that the sales rate for single-family resale homes dropped 36.2 percent in the state in November compared to the same month last year, with the median price falling 11.9 percent year-over-year in November.


Send tips or a Letter to the Editor to, or call (510) 658-9252, ext. 137.

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