California New Home Sales Down 30% in 2007

The CBIA and Hanley Wood Market Intelligence have released new home data for California for all of 2007 and December of 2007:

The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that net new home sales during 2007 in the subdivisions tracked by Costa Mesa-based HWMI totaled 61,861 homes and condominiums, compared to 89,773 in 2006, a decline of 31.1 percent. Sales of single family homes dropped by 29.7 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 21.6 percent and sales of condominiums were down 38.6 percent. The figures for December were even more dour, with year-over-year declines just shy of 67 percent.

Meanwhile, the median base sales price in these subdivisions dropped 4 percent in 2007 compared to 2006, a figure which would likely be larger if not for a change in the mix of units sold. The 4 percent drop also does not include any of the builder incentives which are commonly used to encourage sales activity.

But the builder's group is hopeful for a turnaround:

Robert Rivinius, CBIA’s President and CEO, said the federal stimulus package signed by President Bush earlier this week will make a significant difference for California homebuyers, but said it was crucial for the Congress and state lawmakers to pass additional reforms to further boost the homebuilding industry.

“Raising the conforming loan limits will undoubtedly help restore consumer confidence, help consumers with adjustable rate loans refinance, and ease the credit crunch that has plagued the housing market for the past year,” Rivinius said.

“But at the same time, more needs to be done. Congress should make the conforming loan increases permanent, and consider further stimulus ideas, such as the tax credit for new-home buyers that helped jumpstart the recovery from a housing slowdown in the 1970s.

“And state lawmakers can and must enact reforms to help here in California, such as giving builders longer to begin construction of approved projects in the light of today’s economy. The quicker the homebuilding industry recovers from this slowdown, the quicker state and local budget crises will begin to ease.”

More on the specific areas which performed best and worst in a later post.