New Building Permits Down 66% in Sacramento
New-home building permits plummeted 66 percent last month in the Sacramento region, compared to January 2007, the latest evidence of a still-struggling housing market.
Only 224 single-family building permits were issued last month in Placer and Sacramento counties, down from 662 in January 2007, according to a California Building Industry Association report released Thursday. January’s building permit activity was 23 percent lower than the 289 permits issued in December.
Sacramento’s activity — or the lack thereof — follows the statewide trend, according to the 7,000-member building association in Sacramento. New-home single-family permits tumbled 62 percent to 2,608 permits for the first month of the year in California, much lower than the 6,858 homes in January 2006.
All but two of the 29 markets the association tracks reported a decline in new-home permits, with Oxnard-Ventura and Modesto eking out small gains from a year ago.
Part of the slowdown is attributed to new building standards, causing some homebuilders to apply for building permits in December, before the changes went into effect.
CBIA chief economist Alan Nevin said the dramatic decline in construction activity could lead to a shortage of homes on the market when the economy recovers.
“We have rarely had a situation where interest rates are low and the California economy is stable and yet there appears to be a hesitancy among potential homebuyers to make the critical purchase decision,” Nevin said in a news release.
State and local leaders should consider new ways to help jump-start the housing market, CBIA president and chief executive Robert Rivinus said.
“Our federal government has taken a good first step in raising the conforming loan limits which will undoubtedly help California in the wake of the recent credit crisis,” he said. “As our state and local governments grapple with projected budget deficits over the next year, our policy-makers should look at ways to streamline the planning process and ease restrictions to make homebuilding more feasible, which in turn will benefit government coffers and the entire economy.”
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