New home sales fall in California
Associated Press
LOS ANGELES — In a sign that the once-resilient housing market could be faltering, new home sales in California plummeted 30 percent in the third quarter from a year ago.
New home sales had been expected to fall in expensive markets such as the Bay Area and Orange County.
But the third quarter ended Sept. 30 also brought steep declines in more moderately priced areas such as Sacramento and the Central Coast, according to a report by the Meyers Group, a research firm based in Irvine.
By comparison, sales in Los Angeles County and the Riverside-San Bernardino area held up fairly well.
New homes represent about 15 percent of the housing market, but they are generally much more expensive.
Existing-home sales in California have been weakening as well as the economy slows. September sales dropped 17 percent statewide from a year ago.
In recent years, new home prices statewide climbed rapidly as builders opted to put up more expensive homes while the economy thrived.
But consumers have become increasingly wary of making big purchases, even as mortgage rates have fallen, and some sellers have begun to lower their list prices.
Increasing statewide unemployment also has crimped confidence and sales.
Esmael Adibi, an economist at Chapman University, said the weakness in the housing market may slow an economic recovery.
The Meyers report showed the decline of the new home market is being felt the most in Northern California, where sales in the third quarter overall fell 42 percent. Sales in the Bay Area, which includes San Francisco and the San Jose area, fell 45 percent and sales dropped 39 percent in Sacramento.
"Real estate is the next big thing to go in the Bay Area," said Ted Gibson, chief economist at the state Department of Finance. "The whole thing is supported by IPOs and stock options and the like, and that's gone away."
In Southern California overall, new home sales fell 20 percent, with transactions stumbling 37 percent in Orange County and 32 percent in San Diego County.
Sales in Los Angeles County declined 13 percent in the third quarter from a year ago, and they dropped 5 percent in the Riverside-San Bernardino area. New home sales in Ventura County were off 30 percent in the third quarter.
