New-home construction in California dropped off dramatically in 2007, with single-family building permits falling 37.1 percent compared to 2006.

Riverside County remained the busiest county in the state for single-family building-permit activity in 2007, even though its volume of single-family building permits plummeted 52.8 percent in 2007, according to Construction Industry Research Board data reported by the California Building Industry Association. A total of 9,766 single-family building permits were issued in the county in 2006, down from 20,692 in 2006.

Statewide single-family building permit activity fell from 108,021 units in 2006 to 67,993 in 2007 — the lowest level of single-family starts since 1982, when 51,160 starts were recorded. Multifamily building permits dropped 21.2 percent, from 56,259 to 44,307. And the combined total for single-family and multifamily building permits declined 31.6 percent, from 164,280 in 2006 to 112,300 in 2007.

Nationally, total single-family and multi-family housing starts dropped 25.3 percent, from an estimated 1.83 million in 2006 to 1.37 million in 2007, the U.S. Census Bureau and U.S. Department of Housing and Urban Development reported earlier this month.

In California, single-family building permits dropped most steeply in Merced County in 2007 among 33 counties detailed in the report, with permits falling 66.4 percent in that county compared to 2006.

Other counties that saw a major year-over-year dive in single-family permits in 2007 were: Imperial County, down 59.2 percent; Ventura County, down 55.6 percent; San Bernardino County, down 50.2 percent; Stanislaus County, down 47.2 percent; and San Luis Obispo County, down 45.6 percent.

Single-family permit activity fell in all but one of the reported counties in 2007 compared to 2006. San Mateo County had a 45.6 percent increase in single-family building permits activity in 2007 compared to 2006, according to the report. The slightest year-over-year declines were in: San Benito County, down 2.9 percent; Marin County, down 5.2 percent; Santa Clara County, down 7.3 percent; Fresno County, down 7.8 percent; and Yolo County, down 8 percent, the report states.

Los Angeles County ranked second for the highest volume of single-family building permit activity in 2007, with 7,408 permits, and was by far the leader for multifamily permit activity, with 12,820. Orange County ranked second in multifamily permit activity in 2007, with 4,894 permits, followed by San Diego County with 3,928 multifamily permits.

Alan Nevin, CBIA chief economist, said in a statement that intervention by the federal government and the Federal Reserve may expedite a recovery in the housing market. “It is now apparent that the federal government is coming to the rescue, and none too soon. The combination of declining interest rates, increasing the conforming loan rate and improvements in the FHA lending practices will lead to a more rapid recovery than initially anticipated,” he stated.

CBIA also reported that total building permits dropped 33.7 percent in December compared to December 2006, with single-family permits dropping 39.7 percent year-over-year in December and multifamily permits falling 46.4 percent.

CBIA is a trade association that represents about 7,000 businesses, including builders, remodelers, subcontractors, architects, engineers, designers and other industry professionals. The Construction Industry Research Board is a nonprofit research center established in 1974.

*Single-family building permit activity only.
Source: Construction Industry Research Board.

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