California New Home Forecast Inches Higher

Based on the "strength" of the single-family market in the Golden State, the California Industry Research Board for the first time this year has adjusted its annual forecast upward. The board now expects single-family housing starts to total 24,900 by the time 2009 comes to an end and total housing starts to reach 40,200. CIRB upped its forecast even though builders took out 40% fewer permits in May than they did in May a year ago. But the 2,203 permits were just 7% fewer than in April, and builders are viewing the slight dip as an indication that the state's new home market is making something of a recovery. On a seasonally adjusted basis, CIRB reported that May's figures were down just 1.6 percent compared to April. Permits for condominiums and apartments fell sharply, however, to just 671 units, down from 1,073 in April and from 3,333 in May 2008. CIRB noted, however, that multi-family construction tends to be extremely volatile from month to month. It also pointed out that a relatively large number of multi-family units were started in March, which may account for the drop off in April and May.