To the dismay of the doomsdayers, the housing bubble just won't burst.
As I have said before, supply and demand is a tough nut to crack as long as interest rates stay favorable.
In California, home builders will still fall nearly 40,000
units short of the amount of new housing that is needed to meet continued strong
demand, even though builders will start construction on as many homes
and apartments in 2005 as they did in 2004. This according to a recent forcast put out just recently by the CBIA.
The forecast, authored by CBIA Chief Economist Alan Nevin, projects that
California will see a total of 210,000 housing starts in 2005, equaling 2004's
production numbers. Last year was the first year since 1989 in which
construction began on more than 200,000 new homes and apartments.
- Housing Units Needed: 250,000
homes and apartments
- Housing Units projected to be built in 2005: 155,000
- Housing Units being built in 2004: 155,000
- Housing Units built in the lat 1980's: 255,000
housing units
Nevin expects prices of single-family
product should increase 4 percent to 5 percent on average statewide.
On the multifamily side, he forecast that 55,000 apartments and condominiums
will be built, adding that the split between the two can't be determined because
many projects originally permitted as rentals convert to condominiums prior to
completion.
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