Calif. new-home building set for banner year -report of a 15-year high

Calif. new-home building set for banner year -report
Thu Oct 27, 2005 7:58 PM ET

SAN FRANCISCO, Oct 27 (Reuters) - New home construction in California is poised to match last year's level, a 15-year high, after a sharp jump in housing starts in September, especially in Riverside County near Los Angeles, a home builders group said on Thursday in a report.

Propelled by a doubling of housing starts in fast-growing Riverside County, southeast of Los Angeles in Southern California, a total of 20,952 building permits for new homes and apartments were issued statewide last month, according to the California Building Industry Association.

That marked an increase of 21.3 percent from August and 20.9 percent from a year earlier, the industry group said in a report based on information gathered by the Construction Industry Research Board.

"In Riverside County -- by far the state's leading growth area -- housing starts doubled in September to 4,140 new homes and apartments, compared to 2,049 in August. That accounts for nearly 56 percent of the statewide increase from August to September of 3,680," the home builders group said in its report.

Soaring home prices in coastal California markets are driving home buyers and builders inland to more affordable areas such as Riverside County, neighboring San Bernardino County and the state's Central Valley.

According to the home builders' group, single-family housing starts in California in September rose to 15,087, up 12.8 percent from August and 20.5 percent from a year earlier. Multifamily starts in California last month totaled 5,865, up 50.8 percent from August and 22 percent from a year earlier, indicating a strong market for condominiums.

Total housing starts in California from the start of the year through September totaled 164,042, an increase of 3.7 percent from the same period a year earlier, positioning starts this year to match last year's total of 212,960, which marked the state's busiest year for home building since 1989, according to the home builders' group.

California has had one of the hottest homes markets in the United States in recent years thanks to torrid demand, low mortgage interest rates, a growing population and a persistent shortfall of housing.