New Permits Fall

Studies from around the state show the areas that are most overbuilt with new construction are the hardest hit areas for price declines and slow sales. Local builders have been adjusting by trimming their inventory, cutting prices and offering incentives. Housing prices will not firm up for builders or existing home sellers until the excess inventory of new homes has been reduced to sustainable levels.

Regional builders pulled 41 percent fewer new building permits for single-family homes during last month than they did in June of 2006. It is an attempt to get inventory levels down and wait for the market to improve. In June of 2005 builders were busy pulling 1,500 permits for the month. Builders in Sacramento, Placer and El Dorado County took out 611 permits during the month for single-family homes and 205 for new apartments or condominiums. Last year area builders built 12,000 new homes. This year the number will be under 10,000.