Monday, January 30, 2006
Record sales of newly built homes in California
Here is an article about the strong new-construction sales market ...
Riverside County leads state in new construction sales
DQ News and Inman News
The number of newly built homes sold by builders in California reached their highest level in at least two decades last year, the result of strong demand and relatively low mortgage interest rates, a real estate information service reported.
A total of 136,228 newly built homes were sold statewide in 2005, up 4.4 percent from 130,480 for the year before, according to DataQuick Information Systems.
Sales in the current real estate cycle surpassed the sales levels of the late 1980s in 2003 when 116,803 newly built homes were sold, passing 1989's total of 103,131. Sales fell to 38,454 in 1993 when the state's real estate market was in steep decline. DataQuick's statistics go back to 1988.
"Builders are a bit more careful these days. They used to build tracts and put up "For Sale" signs. This time around, they're building a couple of homes to show potential buyers, getting sales contracts signed with a deposit, and then building the rest of the tract. They don't want to get caught with unsold inventory like they did in the early 1990s," said Marshall Prentice, DataQuick president.
Riverside County led the state with 26,294 new-home sales, followed by San Diego County with 14,497 and Los Angeles County with 10,872.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. The numbers include newly built homes sold by builders, as well as condo conversions. Tear-downs and homes built by individuals are not included, nor are apartment complexes.
The median price paid for a new home was $439,000 last year, up 13.7 percent from $386,000 the year before. Newly built homes were most expensive in San Mateo County where last year's median was $900,000. Homes were least expensive Madera County where the median was $288,500, DataQuick reported.
Riverside County also remained No. 1 in the state for single-family construction, according to the California Building Industry Association. According to preliminary year-end data from the Construction Industry Research Board, housing starts - as measured by building permits issued - totaled 207,154 during 2005, a 2.7 percent decrease from 2004, but the second consecutive year with permits surpassing 200,000. The total includes 154,816 single-family homes (up 2.2 percent from 2004) and 52,338 apartments and condominiums (down 15 percent).
Riverside housing starts were followed by San Bernardino, Los Angeles, Kern, and San Diego counties. In multifamily construction, Los Angeles County remained the leader, followed by San Diego, Riverside, Santa Clara, and Orange counties. Riverside remained the leader in total housing starts, followed by Los Angeles, San Bernardino, San Diego, and Sacramento counties.Among counties with significant amounts of single-family construction, Contra Costa recorded the largest increase in 2005, with starts increasing by 26 percent and boosting the county from 11th to ninth place statewide. Kern County was close behind, with starts increasing by 23.6 percent and rising from sixth to fourth place statewide.
Among the top 10 counties for single-family production, the largest declines were recorded in Sacramento, down 23.3 percent, and San Diego, down 17.4 percent.
During December, single-family starts stabilized, falling just 1.2 percent from November but down 15.6 percent from December 2004. Multifamily starts - traditionally very volatile from month to month - declined by 30.8 percent compared with November and dropped by 57.9 percent from December 2004. Total starts for the month were down 11.2 percent from November and down 33.2 percent from December 2004.
CBIA Chief Economist Alan Nevin projects that in 2006, housing production will drop slightly, to between 185,000 and 205,000 homes, condominiums and apartments statewide. He expects single-family production to decline from 2005 levels but believes multifamily starts are likely to increase slightly this year.
Despite the strongest two-year production numbers in 15 years, however, home builders still did not build enough new homes and apartments to meet the state's unrelenting need for more housing, CBIA's top official said.
"Given California's constant population growth of between 500,000 and 600,000 people a year, the state needs about 240,000 new homes and apartments every year just to keep pace. Unfortunately, we haven't hit that level since the late 1980s, and unless major reforms are enacted at the state level to allow increased production, it does not appear that we will reach it anytime soon," said Layne Marceau, CBIA's chairman and a San Francisco Bay Area home builder.
Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
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