California Builders See Better Days Ahead

Builders in California are still waiting for the impact of the state's landmark tax credit for new home buyers. For now, though, sales are just bouncing along at a historically low pace, the California Building Industry Association reported. In February, only 1,918 houses and condos were sold in the Golden State subdivisions tracked by Hanley-Wood Market Intelligence, Costa Mesa. That's up from 42% from the record low recorded in January, but it's down by more than half from the 4,170 sales logged in February 2008. Still, noting that the state has received more than 3,100 applications for the $10,000 state tax credit which is in addition to the $8,000 federal credit builders are hopeful. "That strongly suggests that the tax credit is working and stimulating the market," said CBIA President Robert Ruvinius. Jonathan Dienhart, director of published research for HWMI, called the February numbers "poor." But because of the improvement over January's dismal figures, he said "they suggest we may finally be seeing the bottom of housing declines." While it is typical for new home sales to pick up in February, the increase this year was much larger than the 11% increase recorded from January to February a year ago.