In this morning's California Building Industry Association report on March sales, CBIA President and Chief Executive Officer Robert Rivinius said housing starts are at their lowest level since World War II.
That line just leapt off the page given that the story line of postwar California is growth, growth and growth. So I called the CBIA offices in downtown Sacramento for a little more explanation.
CBIA communications specialist Michael Castillo said the California Construction Industry Research Board has tracked housing starts since 1954 - when 207,000 residential units were started.
In the 54 years of boom and bust since then the lowest year for housing starts was 1993, when builders started only 84,000 units, he said.
If anyone remembers 1993, it was a year when recession and the Cold War's end clobbered California with base closings and job losses. Crime was rampant and the mood in this state was pretty glum. Come to think of it, that was even before Netscape became a Web browser, back when AOL was still called AO-Hell for its busy signals. Whoops, we're off on a tangent here...
Anyway, that 1993 record low of 84,000 units is likely to be broken amid the great housing bust that seems to be peaking in 2008. Castillo said the Construction Industry Research Board predicts builders will start only 80,000 homes, condos and townhouses this year.
Now, there are two ways of looking at this. One, as a great disaster with slumping construction payrolls etc. Yet, one of the biggest problems right now in California is too much inventory for sale and more coming on the market daily as bank repos pile up. Anything that reduces inventory right now would appear a plus - and that might include record low production of new homes.
If you read the CBIA news release you'll see that they're seeing a silver lining: three straight months in which the decline of year-over-year sales has has narrowed instead of grown. The CBIA thinks that may be a sign that this year is the worst, when the market finds a bottom.