New home building in California dipped slightly in November from the same month last year, falling well below the number needed to meet demand and keeping pressure on the already record rents and home prices.
Statewide, builders pulled permits last month at a rate that would result in 142,800 new homes this year, less than 1% below the level of home building activity in November 1999, according to a monthly housing report released Wednesday by the state Department of Finance.
Last month's activity, though, was still 7% higher than the previous month.
Ted Gibson, chief economist at the state's Department of Finance, early this year predicted that 156,000 permits would be pulled this year, and has since lowered his estimates. He now predicts that 147,600 permits will be pulled, higher than any year since 1990, when 164,300 housing starts were recorded.
This year's rate, real estate experts say, is far below the 220,000 to 250,000 units a year needed to meet housing demand.
"It means there's a fairly undersupplied market, not so much in single-family homes, but in multifamily [units]," he said. "The pressure on rent will persist because of a lack of multifamily units."
Last month, attached homes were constructed at a rate that would lead to only 32,900 new units annually. Builders pulled permits for single-family homes in November that would lead to 109,900 houses this year.
California is on pace to put up more homes this year, but the nation's housing market is showing signs of slowing. Through the first nine months of the year, single-family starts are running 4% behind from a year earlier, and multifamily starts are down 3% during the same period, according to the Meyers Group, an Irvine real estate research firm.
Most major metropolitan areas posted record home-building figures last year, producing about 8% more houses than buyers, said John Burns, an analyst at the Meyers Group. But in California, builders say activity has been constrained by construction-defect lawsuits, a lengthy approval process and a lack of building sites.