California New-Home Market Stumbles Through February, CBIA Announces

SACRAMENTO, CA – April 15, 2010 – (RealEstateRama) — The pace of home sales at California new-home communities was once again notably lower than levels seen a year ago, 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 nearly 25 percent below February 2009. This was worse than both the 12 percent year over year decline last month and the 15 percent drop in December. During January, 1,938 new homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 2,570 in February 2009. Sales of single-family homes were down by 24 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were off by 22 percent and sales of condominiums were 29 percent lower than a year ago.

While sales were still down, the base price of units sold was slightly higher than a year ago, although still lower than last month. Compared with the same period last year, the median base price of homes sold was 4 percent higher than a year ago.

Non-seasonally adjusted total new-home sales were 3 percent above levels seen last month, which was a much smaller increase than typically seen during the first two months of the year.

Jonathan Dienhart, Director of Published Research for HWMI, noted the figures for February illustrate the challenges the new-home market still faces.

“The February numbers are a stark reminder that we are still wallowing at the bottom of this housing market cycle,” said Dienhart. “The extended federal tax credit and new California tax credit may help spur some sales activity in March and April, but even so it’s apparent we have a long road ahead before we can consider the market in true recovery.”

Liz Snow, CBIA’s President and CEO, added that the February numbers present more evidence to support the need for the recently-adopted state tax credit for new and existing home purchasers.

“These numbers represent the clear need for the new tax credit for homebuyers, and we’re thrilled that state lawmakers recognized the need and enacted the credit,” said Snow. “We expect to see some increases in the new-home sales and construction numbers once more people become aware of the new credit.”

Snow also noted recent reports of increased state tax receipts and said the news was encouraging.

“Stabilizing the state’s fiscal situation is necessary to help restore Californians’ confidence in the economy and begin to move the housing sector along the road to recovery.”

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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.

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Media Contact:
Michael Castillo
Communications Manager
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org