Industry NewsMarkets & Economy

Fewer new homes expected in California

Real estate brief

The combination of declining new-home production and the hardship of trying to sell off existing inventory has led California home-building analysts to lower their construction forecast for 2008. The Construction Industry Research Board (CIRB) says it is now projecting a total of 70,000 housing units for 2008, down from the 75,000 units projected last month, with only 74,000 units projected for 2009. According to CIRB's statistics, a total 4,484 single-family and multifamily permits were pulled in August statewide, down 21 percent from July and 61 percent from a year ago. Robert Rivinius, president and CEO of the California Building Industry Association, said in a press statement that the low construction forecasts for 2008 and 2009 could lead to increased prices once the market turns around. "When the inventory of foreclosed and unsold homes has been absorbed, California could face a shortage of new homes to buy, possibly leading to increased prices due to normal sup...