By Mike Colpitts
Anchored by a jump in multi-family building permits, new housing starts soared in California during August, despite a decline in starts elsewhere in the U.S. Housing starts during the month nationally totaled just 571,000 units, the fewest since record keeping has been monitored during 1970.
Permits were pulled on 4,695 housing units during August in California, up 30% from the same month a year ago and nearly double over July figures. Building permits for multi-family units made up 2,867 units, representing a 68% increase from a year ago as Californians seeking rentals increase in light of the foreclosure crisis.
Industry analysts are hopeful that a recovery in the new home building market in California will lead to stronger home construction and home sales elsewhere in the U.S. and eventually produce a housing recovery.
Some 1,828 building permits were for single family home construction, a 20% jump from July. Total residential permits taken out for the first eight months of the year were 30,128, according to the California Construction Industry Research Board, which compiles the statistics for the building industry.
“It’s great to see the increase in the overall numbers and we hope to see continued increases throughout the remainder of the year with the hope of improving upon last year’s homebuilding pace,” said Mike Winn, the association’s CEO.
“The fact remains that economic conditions in the state — tight credit for buyers and builders, the glut of foreclosed and distressed properties on the market and high unemployment — are keeping California’s struggling housing industry from experiencing the type of robust recovery we’ve seen in the past.”
New home sales also remained at a slow pace nationally, dropping 2.3% to an annual pace of 295,000 units, according to the Commerce Department. Discount-priced foreclosures and cheaper bank assisted short sales continue to slow new home sales as buyers pick through the inventory of lower priced re-sale homes before buying newly constructed properties.
New homebuilders like KB Homes and Lennar Corp. are hurting as a result as they wait out the downturn with high unemployment, tight credit constraints and weak consumer confidence signaling that it is likely to take a number of years to produce a full housing recovery.