Housing Starts Fall 11% in August

Times Staff Writer

California housing construction suffered its biggest decline in 18 months in August, as the number of starts fell nearly 11% from year-earlier levels, data released Wednesday showed.

Industry groups said the plunge was not a sign of a slowdown in the state’s real estate boom. They attributed it instead to a hike in permit fees that took effect Aug. 1 in Riverside County, one of the state’s fastest growing housing markets with about 20% of all new residential construction. Many builders obtained their permits in July to avoid paying the higher fees, the Construction Industry Research Board said.

Last month, 16,522 building permits were issued statewide, the research group said. Of those, 12,850 were for single-family residences, down 5% compared with August 2004 and off 9% from July. In Riverside County, housing starts fell 17% from the year before and 30% from the previous month.

In the more volatile multifamily construction market, starts statewide fell 27% to 3,672 in August compared with a year earlier, and were down 19% from July, the research group said.


Alan Nevin, chief economist for the California Building Industry Assn., said monthly statistics can be volatile.

“There can be as much as a 10% to 15% swing in any month, particularly in multifamily statistics,” he said.

He said a better number to focus on was the statistic for the first eight months of the year, which showed that starts were up 1% compared with the same period a year earlier.

That suggests that housing starts in California will come close to last year’s 212,900 starts, Nevin said. Last year’s total was the highest in 15 years.