California Starts Up in June

Building permits were pulled in June for 12,292 single-family homes in California, up 2.9% from the previous month, according to the Burbank-based Construction Industry Research Board.It was the fifth straight month-over-month gain in single-family production for the bellwether state. Multifamily starts (condominiums and rental apartments) totaled 6,883 in June, nearly a 100% jump from their level in May, but multifamily permitting tends to be much more volatile than single-family starts on a monthly basis. Overall, Golden State builders started 19,175 units in June, an increase of 24%. However, starts for the year to date are down 12%. At the current rate of production, some 175,000 units will be built in California this year, said Alan Nevin, chief economist at the California Building Industry Association. Mr. Nevin attributed the slowdown to a substantial unsold inventory of homes that builders are trying to work down by offering incentives rather than price concessions. With "developer fees" sometimes totaling $100,000 per unit and land costs running $150,000 per unit, California builders have little room to trim their prices, the CBIA says.