California new home sales still sluggish in January

According to the most recent CBIA/HWMI press release, new home sales in California during January fell by 62 percent from the same month of 2007 while median prices declined by 13 percent:

The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New Home Sales and Pricing Report showed that new home sales in January were over 62 percent below January 2007. While a staggering percentage decline, the drop is slightly less severe than the year-over-year decline of nearly 67 percent in December.

During January, 2,679 homes and condominiums were sold in the subdivisions tracked by Costa Mesa-based HWMI, compared to 7,109 in January 2007. Sales of single-family homes dropped by 61 percent, while sales of townhomes and “plexes” – duplexes, triplexes, etc. – were down 71 percent and sales of condominiums were down 58 percent.

Compared with the same period last year, the median base price of homes sold dropped by 13 percent.

Non-seasonally adjusted total new-home sales were 29 percent higher than levels seen in December, although it is not unusual for January to show a much faster pace of sales activity than December. Median base sales prices statewide were 0.2 percent lower than in December...

In the same release, CBIA CEO Robert Rivinius called for three different legislative measures to be passed to help expedite an eventual homebuilding recovery in California:

“First, we would ask lawmakers to pass SB 1185, which would give builders an additional two years to build on home sites approved by local officials,” Rivinius said. “Normally, these subdivision maps require homes to be completed within two or three years, which in many cases will not occur given the housing downturn.

“SB 1185 is urgently needed and has been put on a fast track in the Legislature, designed to get it enacted and in place as soon as possible. Failure to act means thousands of entitlements will expire, forcing builders to unnecessarily go through a time-consuming and expensive process to get new entitlements approved and delaying a long-awaited industry recovery. Similar legislation was passed in the mid-1990s and helped produce a seamless and uninterrupted recovery.”

He said lawmakers should also approve AB 2604, which would allow builders to pay local impact fees when a home is sold instead of when the building permit is obtained. Since these fees often total $50,000 or more per house - $100,000 per home in a growing number of communities – the bill would significantly help builders avoid a cash squeeze.

The third measure is AJR 45, a joint resolution that calls on Congress and the President to permanently increase the federal conforming loan limits and allow mortgages of up to $729,000 to be purchased by Freddie Mac and Fannie Mae, the federally backed lending giants created to ensure a reliable source of credit for homebuyers.

Want so see how the various metro markets in California performed during January? Download that here.