New Home Market Not So Golden in California

Sales in California's new home projects slowed even more in February than they did in the previous two months, according to the state's builders. The monthly report from the California Building Industry Association and Hanley Wood Market Intelligence showed that year-over-year sales in communities of 10 units or more were down nearly 25%, far worse than the 12% slide recorded in January and the15% drop registered in December. A grand total of just 1,938 new houses and condos were sold in the entire state in February vs. a mere 2,570 units a year earlier. Jonathan Dienhart, director of published research for the Contra Costa-based HWMI, said the February figures show the nature of the challenges still facing the new home market in the not-so Golden State. "The February numbers are a stark reminder that we are still wallowing at the bottom of this housing market cycle," he said. "The extended federal tax credit and new California tax credit may help spur some sales activity in March and April, but even so it's apparent we have a long road ahead before we can consider the market in true recovery." On a little more positive note, the base price of units sold was slightly higher than a year ago, although still lower than last month. Compared with the same period last year, the median base price of homes sold - $365,240 - was 4% higher than a year ago.