Sunday, January 15, 2006

Area housing boom may not go bust

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Article Last Updated: 1/05/2006 06:54 AM

Area housing boom may not go bust

By Amanda Janis/Business Writer

Despite probable statewide declines in new housing starts, the 2006 production level of new housing units in the Bay Area and Sacramento regions will replicate that of 2005, according to a report released Wednesday.
The second annual California Building Industry Association housing forecast predicts a 'gentle slowdown' in construction of single family residences, as well as a modest decline in construction employment that will 'have an overall dampening effect on the state's economy.'
The association's chief economist, Alan Nevin, said during a teleconference Wednesday, that while there will be a slowdown during the first quarter of 2006, 'spring will bloom again, and we'll see that the construction industry and new housing will move forward at the pace it has been for the last couple of years.'
Nevin explained that if the market warms back up in the spring, it 'will allow us to complete 2006 with maybe 10 percent decline.'
Despite the projected slowdown, the Bay Area is expected to produce 26,000 to 28,000 units in 2006 - the same number as last year, according to the forecast, which estimates 40 percent of those units to be multifamily.
Sacramento, likewise, is expected to produce the same number as last year, approximately 20,000 units, though numbers may increase for both regions should proposed multifamily residence and high density projects come to fruition, according to the forecast.
Chris Gustin, Vacaville's assistant director of community development, said that Vacaville's number of new housing starts will not necessarily be the same as last year'"

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