Home production in California is grinding to a halt. The number of single-family home permits dropped 61% to 8,189 during the first quarter of this year compared to the same period in 2007, according to an April 25 report from the California Building Industry Association.
To put it in perspective, 35,329 single-family home permits were issued in california during the 1st quarter of 2005.
These days building new homes makes little sense with so many foreclosed homes competing for buyers. Builders are waiting for the market to turn around, said Alan Nevin, the builder group’s Chief Economist.
“It basically is a case where builders have more or less decided not to build,” Nevin said. “They are almost viewing this as being custom home builders to the extent that they almost won’t start a new home until somebody has bought it.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.