California Returning to 'Slow Growth'?

The term "slow growth" was the bane of the homebuilding business for years, but now builders in the Golden State, where "a modest recovery" is expected to begin sometime around midyear, welcome the idea.Alan Nevin, chief economist of the California Building Industry Association, is projecting a "slight increase in new-home sales" in 2008. He bases his forecast on continued population growth, a continued reduction in inventory, and a "return to normalcy" in the credit markets. Specifically, Mr. Nevin is projecting sales of 80,000 new houses this year vs. about 70,000 in 2007. With the upturn, he is also forecasting an increase in starts to 128,400, a number that is almost 90,000 shy of the record 212,960 units begun in 2004. The economist also expects multifamily production to bump higher this year, from some 44,000 units in 2007 to 46,700 in 2008. CBIA is a statewide trade group representing more than 7,000 businesses -- builders, remodelers, subcontractors, and allied professionals -- that employ more than 500,000 people.