California New-Home Market Breaks into Positive Territory, CBIA Announces
SACRAMENTO, CA – December 10, 2009 – (RealEstateRama) — The pace of home sales at California new-home communities rose above year-ago levels for the first time since December of 2006, the California Building Industry Association reported today.
The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more were 25 percent above October 2008, a strong improvement from the lingering year-over-year decline last month and represents the first notable increase since the start of the housing downturn. During October, 2,294 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 1,838 in October 2008. Sales of single-family homes were up by 4 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were up 36 percent and sales of condominiums were 94 percent higher than a year ago thanks to strong sales at projects in the Los Angeles and San Francisco areas.
Compared with the same period last year, the median base price of homes sold was still down, however, dropping 4 percent.
Non-seasonally adjusted total new-home sales were 1 percent below levels seen last month. This is also an improvement from the 29 percent decrease seen last year for the same month-to-month period.
Jonathan Dienhart, Director of Published Research for HWMI, noted the encouraging figures should be kept in perspective.
“While this month’s figures are encouraging, we must keep in mind that we’re comparing the figures to October of 2008, which was the second lowest month of nominal sales we’ve seen during the downturn,” Dienhart said. “Examining the data in a rolling twelve months tells a more realistic increase, with a 1.5 percent rise from last month.”
Dienhart also noted that the numbers could be distorted due to buyers rushing into the market to take advantage of a federal tax credit that was due to expire shortly after this time period.
“The next two months should still show some year-over-year gains due to how weak November and December of 2008 were, but are not likely to be as large as the 25 percent rise this month,” Dienhart said. “With all the significant economic obstacles facing California home buyers, it won’t be until next year when we see if or when a true recovery may materialize.”
Liz Snow, CBIA’s President and CEO, agreed and added that lawmakers should continue to look at ways to ensure a housing recovery, and a broader economic recovery, in the coming year.
“It’s great to finally see a year-over-year increase after seeing sales declines for so long, but the fact that we’re comparing the latest numbers to one of the lowest sales months of the downturn still doesn’t bode well for a housing recovery in the near future,” said Snow.
Snow noted that increased home sales will lead to more job-generating new-home construction and urged lawmakers to look at the benefits generated by the housing industry when taking up future legislation.
“Studies show that each new home built generates anywhere from two to three jobs and produces roughly $16,000 and $3,000 in tax revenues for state and local government, respectively,” said Snow. “We hope our state lawmakers will take into account the profound economic and fiscal benefits generated by the housing industry and take action to bolster the housing sector in hopes of encouraging a broader economic recovery in 2010.”
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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.
Hanley Wood Market Intelligence is the housing industry’s leading provider of rich data and consulting services on residential real estate development and new-home construction and is a division of Hanley Wood, LLC, the premier media company serving housing and construction. More information is available on the company’s Web site, www.hanleywood.com/hwmi or by calling 1-800-639-3777.
Hanley Wood Market Intelligence (HWMI) collects data from new for-sale production subdivisions of 10 units or more on a monthly basis. HWMI Net Sales represent sales contracts signed during the period indicated minus any reported cancellations. Median and Average Prices are based upon the minimum asking price of the plans sold during the period and do not include the cost of any lot/view premiums or upgrades. Because this data is collected monthly and based upon sales contracts that represent future closings, HWMI data is the most forward-looking data source available for new home information in the state of California.
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Media Contact:
Michael Castillo
Communications Manager
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org
