For most of 2008, it has seemed that California's home building industry could hardly scale back its expectations further. But it did just that on Wednesday.
The Construction Industry Research Board has downsized estimated home starts in California this year to 70,000. A month ago, it estimated construction would begin on 75,000 homes this year.
The board now predicts California builders will start only 74,000 residences in 2009.
Housing permits peaked at 212,960 in 2004 before the real estate market began a decline. The downturn has gathered speed, forcing widespread layoffs and financial difficulties in a building industry competing with discounted bank repos. Builders say this will be their least productive year since the state began keeping records in 1954.
"In essence, the industry has come to a standstill, with minimal indication of improvement during the balance of the year," said Alan Nevin, chief economist for the California Building Industry Association, in a statement.
Early this year, Nevin predicted builders would take out permits for 128,400 single-family homes, apartments and condominiums in 2008. Acknowledging that he was being more optimistic than most economic thinkers, Nevin predicted a slight rebound during the second half of 2008 and a "modest recovery."
On Wednesday, he said, "We have been taken aback by the dramatic cutback in single-family home production in California."
Builders took out 4,484 building permits in August, down 60.5 percent from the same time last year and 21 percent less than in July. Statewide, they've asked for 46,874 residential building permits in the first eight months of 2008. That's 45 percent less than the 85,422 at the same time last year, the CBIA announced.
Builders have cut back almost as hard in El Dorado, Placer, Sacramento and Yolo counties. They've started 3,883 residential units so far this year, down 40.7 percent from 6,547 last year. They started 347 homes, apartments and condos in August, down by half from August 2007 and 17 percent less than in July.
The numbers show that builders in Yuba and Sutter counties started only eight homes in August, down almost 94 percent from the same month last year. The tally was down 62 percent from July.
Builders in the two counties have started 196 homes in the first eight months of 2008, compared with 933 the same time last year, the CBIA reported.
When it comes to sales this year, master-planned communities have accounted for 20.6 percent of the action, building industry analyst Hanley Wood Market Intelligence reported Wednesday.
The Costa Mesa firm said Roseville's WestPark neighborhood has seen 227 sales the first half of 2008. That's a 7.6 percent market share in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.
Rocklin's Whitney Ranch placed second with 131 sales, 4.4 percent of the market. Westshore in Natomas followed with 89 sales, a 3 percent market share. Tied for fourth and fifth was Riverdale in West Sacramento and Plumas Lake in Olivehurst, each with 83 sales and 2.8 percent share, Hanley Wood reported.
Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.
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