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table listing housing starts by type and by metro area is available on the CBIA Web site. Need a local contact? See our list of local BIA/HBA
media contacts in your area. SACRAMENTO - Total housing starts in California in May increased by a little over 2 percent compared to April's level, the California Building Industry Association announced today. According to housing permit data supplied by the Construction Industry Research Board, single-family housing starts in May stayed relatively level around the state while multifamily homes saw a strong boost in permits being pulled. However, production for both single-family and multifamily units is still well behind starts recorded during the same period one year ago. In May, permits were pulled for 7,164 single-family homes statewide, down just 2.5 percent from the previous month but down 40 percent from May 2006, while multifamily housing starts - condos and apartments - totaled 3,574, up 14 percent from the previous month and down 2 percent compared to May 2006. Overall for the month, builders pulled permits for 10,738 homes, condos and apartments, according to statistics compiled by the Burbank-based CIRB. During the first five months of the year, production began on 54,277 homes and apartments, nearly 29 percent less than last year's total. When compared to the first five months of 2006, single-family housing permits were down 33 percent. CBIA Chief Economist Alan Nevin said that the Riverside/San Bernardino metropolitan area continues to account for about 50 percent of the decline this year in single-family housing production, while the production in the rest of the state was relatively stable. In the multi-family sector, permit activity was down 19 percent during the first five months of the year. "The only downturns of major proportions were in Riverside/San Bernardino and the San Francisco/Oakland area. Those two areas accounted for 50 percent of the multi-family permit decline," said Nevin, noting that multi-family permit activity in most other areas generally matched production levels through May 2006. "Overall, we see evidence of returning stability to the new residential sector and anticipate that stability to be maintained throughout the balance of the year," Nevin said, attributing the stability to a far-lower level of production than what was seen in the recent boom as builders have become more cautious about constructing new homes in large volumes. "Statewide, the number of new projects has dwindled, a situation that will most certainly cause an imbalance between supply and demand when the market returns to a more elevated level of demand," he said. Lower production statewide is not good news for prospective homebuyers struggling to buy their first home, as Nevin emphasized that the demand for the homes on the market today is not the same as the state's chronic need for new housing to accommodate its growing population. CBIA President and CEO Robert Rivinius added that the industry needs to build well over 200,000 new homes, condos and apartments a year to meet the need for housing. "While it's great to see some increase and stability in production, California still needs between 220,000 and 240,000 new homes and apartments each year. Unfortunately, ever-rising fees and constraints put on new housing production makes it nearly impossible to reach those levels," Rivinius said. "What's even more pressing is the need for housing in the entry-level market. Unless major reforms are enacted soon, it's doubtful we'll meet that need in the near future."