California gets grim housing outlook

June 25, 2008 7:00:09 PM PDT
California has the worst housing market in recorded history. That's what California's Building Industry said at their annual convention in San Francisco. They started keeping records in 1954 in California in terms of the housing market. We know the market is hurting, but some industry insiders told ABC7 News that it may get worse. The only sizzle at this year's building convention is coming from sausage. "There's no question the housing industry is in extremely dire straits," said Chairman of the California Builders Industry Association Ray Becker. Becker's day job is vice president of a development company that takes raw land and turns it into houses, shopping centers and business parks. He told ABC7 News his company isn't in the market for any new real estate. "And I think that's the case within the industry," said Becker. The chief economist for the Building Association says there were fewer permits pulled this past year than for any other year since 1954. "We're talking about a massive decline in production," said Chief Economist from the California Builders Industry association Alan Nevin. Nearly 200,000 jobs were lost in the construction and mortgage loan industries in California, and then there are the spin-off effects. "Furniture distributors who are going out of business simply because there are no buyers, and interior decorators landscape companies," said Becker. "It touches everything," said Tom Halford from Whirlpool Corp. Halford is marketing general manager for Whirlpool, which also owns Kitchen Aid and Jenair. They are the makers of stove tops, refrigerators, dish and clothes washers and kitchen sinks. "The downturn has been more than double digits without a doubt," said Halford. Colder than it's ever been since World War II is what they're saying at the convention, which itself is seeing a dramatic reduction in participants. "When I look around here now and the traffic and kind of the feel I have, it might be about half," said John Taylor from LP Corp. And everyone is saying we've not seen the bottom yet. "A lot of people however are saying that they believe the worst will be over about this time next year," said Becker. Becker says because of gas prices, the suburbs furthest from the job centers will be the slowest to recover. There will be more infill and more condos will be converted to apartment buildings. If you bought your house near the market's peak in January of 2006, he can't say when you'll see that price again. "I wish we knew because that's the critical, if someone will call the bottom then we can project the future, and nobody's been prepared to do that," said Becker. Builders want the government to extend permit times and waive or extend the time they have to pay fees. They also want to get rid of environmental laws they say hampering the industry. If they can't get rid of them, at least they can help them get around them.

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