Thursday, January 19, 2006

2006 CBIA Housing Forecast

California's housing production is expected to drop slightly in 2006 compared to the robust construction activity in 2004 and 2005, but still remain near 200,000 homes and apartments, the California Building Industry Association reported today.

The forecast, authored by CBIA Chief Economist Alan Nevin, projects that between 185,000 and 205,000 homes, condominiums and apartments will be built in 2006 - down from about 212,000 in each of the previous two years.

"The annual demand for new homes in California continues to be in the 240,000 range, but the homebuilding industry is able to provide only 80 percent of the total need," Nevin said.
He added that most of the decline would be in the high-end segment in coastal areas, while more-affordable areas, such as the San Joaquin Valley, should see construction continue at higher levels.

He also forecast that housing price increases would flatten out in some markets, and overall would be in the 5- to 8 percent range - well below the 25- to 30 percent increases seen in the past couple of years.


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