California new-home closings fall 36% year-over-year in June, led by 67% drop in condo closings: CBIA/Hanley Wood

SACRAMENTO, California , August 25, 2010 (press release) – The pace of new-home sales across California continued to see lackluster demand conditions in June, the California Building Industry Association reported today.

The monthly CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that statewide new-home closings in June were off 36 percent from a year ago. During the month, 2,454 new homes and condominiums were closed across the state, compared to 3,848 a year earlier. Closings of single-family homes were down by 17 percent, while sales of townhomes were off by 57 percent and sales of condominiums were 67 percent lower than a year ago.

While sales were still down, the base price of units sold was a bit higher than a year ago, and slightly higher than last month. Compared with the same period last year, the median base price of homes sold was 3 percent higher than a year ago.

Non-seasonally adjusted total new-home sales were 3 percent above last month, which is historically typical.

Jonathan Dienhart, Director of Published Research for HWMI, noted the figures for June were a continuation of the most recent downward slump in housing.

“We’re still in the doldrums,” said Dienhart. “The summer of 2010 is looking to be an extended hangover from the federal tax credit expiration and ongoing economic strife. Until the job market turns around and distressed property sales subside, it will be hard for California’s new-home market to show meaningful signs of recovery.”

Liz Snow, CBIA’s President and CEO, agreed.

“The new-home market continues to struggle in the wake of a struggling labor market, and until consumers become more confident in their job security and job prospects, we don’t anticipate they’ll be rushing out to buy a home,” said Snow.

Snow noted that it was encouraging to see the month-to-month increase in new-home sales, which was not seen in the previous month’s report, and again wanted to remind everyone of the state incentive for new-home buyers.

“As of August 17, the Franchise Tax Board has received nearly 13,000 applications and reservations totaling an estimated $84 million for the tax credit for purchasers of new homes,” said Snow. “We encourage those who can afford to buy a home to take advantage of the credit as it won’t last much longer.”

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The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association's Web site, www.cbia.org.

Hanley Wood Market Intelligence is the housing industry’s leading provider of rich data and analytical services on residential real estate development and new-home construction and a business unit of Hanley Wood, LLC, the premier media company serving housing and construction. More information is available on the company’s Web site, www.hanleywood.com/hwmi or by calling 1-800-639-3777.

Hanley Wood Market Intelligence (HWMI) tracks home closing information by builder on a monthly basis for the state of California and across the country. HWMI closings represent completed transactions during the period indicated. Median and Average Prices are based upon the final closing price of the transaction as recorded with the associated municipality. Through its data platform, Housing IntelligencePro, HWMI provides the most comprehensive housing data resource available.

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