According to the California Building Industry Association's forecast released on Thursday Jan 3, 2008, the trade group is predicting that the state's house slump is near the bottom and business will be increasing steadily in the near future.
Below is the article from National Realtors Association's newsletter.
Daily Real Estate News | January 4, 2008
California Builders: The Worst is Over
A California trade group is predicting that the state's housing slump is near bottom and business will rise steadily.
In a forecast released Thursday, the California Building Industry Association said developers will secure permits for 128,400 single-family and multifamily units this year, up from an estimated 116,250 in 2007. The 10 percent gain is in contrast to the 29 and 21 percent drops in housing permits in 2007 and 2006, respectively.
"We believe that California has weathered the subprime storm of 2007, the market has almost corrected and that 2008 represents an opportunity to move forward," said Alan Nevin, the Sacramento association's chief economist, on a conference call.
Some expert observers were critical of this analysis. Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange, says the number of new homes on the market will remain the same or increase this year as foreclosure and default levels climb. He predicts housing production will fall 8.8 percent to 102,000 units as resale home prices drop by 8 to 9 percent.
"I will not be surprised to see that this cycle will bottom sometime in 2009 or early 2010," says Adibi, citing past patterns.
Source: The San Francisco Chronicle, James Temple (01/04/07)