Continued Signs of Life in California Housing

The pace of new home sales in California was above the year-ago level in October for the first time since December 2006, according to the state builders' association. Sales in projects with 10 or more units were 25% above the October 2008 figure, and is the first notable increase since the start of the housing downturn, the California Building Industry Association reported. Buyers scooped up 2,294 new home and condominium units in October vs. 1,838 a year ago, according to the joint CBIA-Hanley Wood Market Intelligence report, which covers properties with 10 or more units. But Jonathan Dienhart, director of published research for HWMI, warned about getting too euphoric about the gain. "While this month's figures are encouraging, we must keep in mind that we're comparing the figures to October of 2008, which was the second lowest month of nominal sales we've seen during the downturn," Mr. Dienhart said. He also noted that the numbers could be somewhat distorted because of a last-minute rush to qualify for the federal first-time buyer tax credit, which was to have expired on Nov. 30 until Congress voted to extend it until mid-2010. While Mr. Dienhart expects more improvement in the coming months, he doesn't think a "true recovery" will appear until next year at the earliest.