New-home permits tumble in state
California home builders focused more on selling homes already under construction than on starting new ones last month, obtaining 42% fewer permits than a year earlier, data released Wednesday showed.
Yet their efforts could help right the market sooner rather than later, said Alan Nevin, chief economist for California Building Industry Assn., a Sacramento-based trade group.
Builders’ push to unload their inventory could be starting to have some effect. A government report this week showed that new-home sales in the West, including California, rose 24.6% in February from a year earlier.
“These data indicate that the unsold inventory is being burned off rapidly, heralding a return to normalcy by the end of the first quarter,” Nevin said.
The largest major market decline was in Riverside and San Bernardino counties, where permit activity dropped 50% compared with February 2006, the group said. Southern California is the state’s biggest new-home market.
Los Angeles County also saw a 50% decline in year-over-year permit activity, but permits rose 13% from January, the trade group said.
In all, California builders last month obtained 9,325 permits, which was a 6% decline from January and a 42% drop from a year earlier.
