New Home Sales Slide Seen Slowing in California

The downward slide in new home sales in California lessened in April for the third consecutive month, a sign that the state's home builders say is an indication that the market is stabilizing. According to the monthly report from the California Building Industry Association, sales in projects of 10 or more units in April were still 31% below what they were a year earlier. But that's an improvement from the 44% decline registered in March and the third month in a row for that trend. "We're definitely headed in the right direction," said Jonathan Dienhart of Hanley Wood Market Intelligence, Costa Mesa, which compiles the figures for CBIA. "Aggressive pricing by builders and tax incentives seem to be helping stabilize the pace of new home sales despite substantial competition from the resale market in the form of foreclosures." In April, 2,771 new houses and condominiums were sold in the subdivisions tracked by HWMI compared to 3,989 in April 2008. CBIA President Robert Rivinius attributed much of the gain to California's $10,000 tax credit, which is on top of the $8,000 federal tax credit for first-time buyers. More than 8,500 buyers have taken advantage of the state credit since it went into effect March 1, with applications for the credit totaling more than $82.5 million. To date, the state has allocated $100 million for the credit, but the builder group is trying to persuade lawmakers to triple the original outlay.