California's New Home Market Shows Some Life

The new home market may be picking up a little steam in California. Though only 2,298 permits were pulled by builders in February — a 66% decline from the same month a year ago — that's still a 15% improvement over January, according to the California Industry Research Board. Better yet, rumblings from the field indicate that traffic has picked up in recent weeks, thanks largely to a combined federal-state tax credit package that could result in a savings of up to $18,000 for buyers who purchase by Dec. 1. "After hearing preliminary reports of increased sales traffic from local builders, we believe the tax credits are doing their job in attracting buyers and we remain hopeful that this will have a positive impact on homebuilding," said Robert Rivinius, president of the California Building Industry Association. For now, though, only 1,261 single-family houses were started in the entire state in February, and work began on just 1,037 multifamily units. The two-month total for 2009 so far: 4,298 starts, a decline of 63% compared to 11,531 for the first two months of 2008. CBIA is now forecasting 50,000 starts statewide for this year, which would be the lowest total on record.