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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