SACRAMENTO, CA – August 29, 2011 – (RealEstateRama) — California housing production fell sharply in July and posted the lowest monthly permit total since January of 2009, the California Building Industry Association announced today.
According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 2,248 total housing units in July, down 45 percent from the same month a year ago and down 53 percent from June. This was the lowest monthly permit total since January of 2009 when 2,104 permits had been issued. Permits for single-family homes totaled 1,436, down 30 percent from June 2010 and down 39 percent from the previous month, while multifamily permits totaled 812, down 61 percent from a year ago and down 67 percent from June.
For the first seven months of the year, permits were pulled for 25,304 total units, down 2 percent when compared to the first seven months of 2010 when 25,754 permits were issued. Permits for single-family homes were down 18 percent while permits for multifamily units were up 23 percent.
Mike Winn, CBIA’s President and CEO, said July’s numbers were disappointing and primarily attributed the slump to poor economic conditions.
“The housing industry in California is still struggling to keep pace with 2010 which was the second-lowest year for housing production in history,” said Winn. “Builders are still competing with a glut of foreclosed and distressed properties while buyers are sitting on the sidelines due to tight lending restrictions and the current climate of economic uncertainty. This has created the ‘perfect storm’ that continues to work against us, but the construction industry is resilient and we will navigate through this just as we’ve done in the past.”
Winn noted that in addition to dismal economic conditions, CIRB attributed some of the decline to secondary effects of the costly green building code changes and fire sprinkler mandates that went into effect on January 1.
“Permits that had been applied for back in December to avoid the costly new regulations had not actually been issued yet and needed to be issued by July 1,” said Winn. “This caused more permits to be issued through the end of June which could account for some of the decline in July, according to CIRB’s analysis.”
CIRB also dropped its 2011 forecast to 46,700 total units, down from 51,000. That would put 2011 just a fraction ahead of 2010’s 44,762 permits, but still down from 2008’s total of 64,962.
The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association’s Web site, www.cbia.org.
The Construction Industry Research Board (CIRB) is a nonprofit research center established in 1974 to provide statistical information on the California building and construction industry. More information is available on the CIRB Web site, www.cirbdata.com.
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