California Builders in 'Dire Straits'

October was perhaps the worst month yet for new home sales in California since the housing sector began its tailspin, according to the latest report from the Golden State's homebuilders. Sales in October were 63% below October 2007, according to the monthly count by the California Building Industry Association. Only 1,462 homes and condominiums were sold in October in the subdivisions tracked for CBIA by Costa Mesa-based Hanley Wood Market Intelligence, compared to 3,949 in October 2007. Single-family home sales were down by 62%, while sales of townhouses and two-to-four unit structures were down 64% and condominium sales were off 65%. Compared with the same period last year, the median base price of homes sold dropped by 9%. CBIA President Robert Rivinius said the "huge fall-off" is further proof that the new home sector in "in dire straits" and needs help in persuading people to re-enter the market. "With homebuilding in a depression, there's little chance the overall recession will begin to improve without tax credits and other incentives to push people off the fence and back into the marketplace," Mr. Rivinius said. The industry leader also said that housing production so far this year is by far the lowest since the end of World War II, and that 2009 is shaping up to be equally bad, or even worse.