CBIA.org - "California Produced 10 Percent of Nation's Housing in 2005, CBIA Announces" (5-26-06)

"California produced 10 percent of all the housing in the nation in 2005, but even that level of production wasn’t enough to meet the need for new housing, the California Building Industry Association announced today."

Please see the C.A.R. article below. I'm not sure why they are saying this since inventory is now building. And who can afford their new inventory anyway?

"According to final, year-end statistics on housing starts around California, homebuilders began production last year on 208,804 new homes, condos, and apartments, down from 212,960 in 2004. California housing starts, as measured by building permits issued, ranked second nationally behind Florida and in a virtual tie with Texas. But that level of production was not evenly distributed across the state, said CBIA Chief Economist Alan Nevin."

Keep in mind much of this inventory hasn't landed on the market yet. This will only exacerbate the problem. What will be on the market longer: new builds or exiting inventory?

"CBIA President and CEO Robert Rivinius said that the state’s housing affordability rate continues to plummet because production still is not keeping up with the need for new homes and apartments. He notes that prospective homebuyers will continue to feel the pinch because supply of new homes and apartments continue to fall short of the demand."

Looks like the N.A.R., C.A.R., and the CBIA are all speaking the same language. The affordability will indeed get better as more inventory lands on the market. Thank goodness California's "soft landing" is "normalizing" the marketplace. I'll be interested to see this year just how many builders decide to personally help solve the inventory problem.

“Unless governmental barriers that make it difficult to supply enough new homes and condos in all growth areas are removed, there’s no way that we’ll be able to begin closing California’s homeownership gap with the rest of the nation.”

What are these "government barriers" mentioned above? Perhaps rising cost of materials and labor and proposed "guidance" on alternativ mortgages?

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