Estate and mortgageWild Wild West: California New Home Rebound Forecast
If fence-sitting new home buyers way out West wait much longer for the bottom of the market, it could very well slip out from under them.
California"s new home market is due to begin its recovery this year, according to the California Building Industry Association.
Now, the housing market won"t come back with boom, but the Golden State"s new home sales in 2008 will outshine new home sales in 2007.
Alan Nevin, chief economist for the state"s new home building association, says you can count on a modest recovery in California"s new home market this year.
Nevin forecasts new, single-family home sales will increase enough in the last six months of 2008 to boost sales to more than 80,000 for the year.
Buyers purchased 70,000 single-family homes in 2007.
Condo sales will edge up too. Buyers are expected to acquire 47,000 new condos in 2008, up from approximately 44,000 in 2007, according to Nevin.
What"s fueling the California comeback?
Nevin says California"s persistent population growth, shrinking new home inventories and a friendlier credit climate will give more consumers incentives to buy new.
However, before there"s another real housing boom in the nation"s largest western state, California has to tackle a host of issues.
Dwindling land supplies, a gauntlet of environmental reviews before development, and what the association considers "capricious and arbitrary" impact fees all stand in the way of the kind of development necessary to keep prices affordable.
"Making more land available for new homes and controlling fees on homeownership will help stimulate the housing industry and ensure the projected gains in the market are realized and the dream of homeownership and economic prosperity are regained, said CBIA chairman Ray Becker.
For 2008, the projected total 128,000 new home sales pale by comparison to the peak level 213,000 new homes sold in 2004.
The state needs to build 240,000 homes per year to develop the kind of affordable housing market that will meet the needs of its growing population, according to the CBIA.