Builders upbeat despite disappointing numbers

Calif. Gov. Jerry Brown talks about the California budget as he addresses the Pacific Coast Builders Conference in San Francisco, Thursday, June 23, 2011.

June 23, 2011 7:39:55 PM PDT
One out of every four properties in Santa Clara County is now valued below its purchase price -- and that is an improvement. Around the country, the sales of newly built homes fell 2 percent last month. Prices are up a little, but real estate remains the weakest segment of the economy.

The band played "Somewhere Over the Rainbow" and Gov. Jerry Brown playing the part of Dorothy, telling builders there is no place like home. Brown Thursday gave the keynote address at the Pacific Coast Builders Conference in San Francisco where he told builders to buck up -- that California is still the land of opportunity, even if the government is gridlocked and the economy sagging.

"I mentioned solar, I mentioned the computers, I mentioned the social networking tourism agriculture California is still an engine of economic advance," Brown said.

But parts of that engine continue to sputter; nationally, sales of new homes are down a whopping 18 percent over the past two years.

Asked what he could to get the economy going, the governor encouraged his audience to get involved in breaking the political deadlock in Sacramento.

"And those who have more capacity and more position have got to go get out of their comfort zone and work for the betterment of the state," Brown said.

Brown added he will try and point out the way, including an extension of existing taxes to avoid more cuts.

In the audience, the chair of U.C. Berkeley's Fisher Center for Real Estate and Urban Economics was even more upbeat than the governor.

"I think prices have bottomed in the Bay Area, especially in Silicon Valley and I think we're beginning to see a recovery; there is not a question in my mind now is the best time to be a home purchaser in 30 years," Kenneth Rosen, Ph.D., said.

On the convention floor, manufacturers of building materials say in spite of this month's new home sales numbers, business is getting better.

"The consumer confidence is coming back a little bit; I'm a little bit more encouraged than I was at the same time last year," Jason McCook of Milgard Windows said.

"We're in the black, we're operating fairly efficiently and we're happy with the results compared to what's gone on in the rest of the world," Mark Shannon of Crossville Ceramics said.

A couple of years ago at the builders' convention it was hard to find a single participant who wasn't singing the blues. Today, they were humming a very different tune, even with the latest disappointing numbers. "Somewhere over the rainbow" looks a bit closer than it did in 2009.

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