February sales of new California homes weak

Larry O. Doss Wednesday, April 15, 2009

February sales of new California homes weak
State tax credit for new homes in demand
By Inman News, Wednesday, April 15, 2009.

http://www.inman.com/news/2009/04/15/february-sales-new-california-homes-weak

Inman news

February sales of new homes in California were down 54 percent from a year ago, but showed modest improvement from January, the California Building Industry Association said.

Sales of single-family homes and townhomes were both down 55 percent from a year ago, while sales of condominiums were off 51 percent. That’s still an improvement from January, when sales in new-home communities of 10 units or more were down 64 percent from a year ago.

Some of the non-seasonally adjusted 42 percent increase in new-home sales from January to February was expected, as new-home sales typically pick up in February. But the increase was larger than the 11 percent gain seen from January to February 2008, CBIA said.

Median base price was down 15 percent from a year ago and 6 percent from January, CBIA said, noting that the reduced sales volume in recent months can produce price volatility.

CBIA President and CEO Robert Rivinius said he expects California’s newly enacted $10,000 tax credit for buyers purchasing newly constructed homes will produce a "significant increase" in March sales.

As of April 8, the California Franchise Tax Board said it had received more than 3,100 applications for the tax credit, which is available to qualified buyers making purchases during the year beginning March 1, 2009, or until the $100 million allocated for the program runs out. Applications for $30.6 million in tax credits, or nearly one-third of the program’s capacity, have been received so far.

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