Builders in November pulled construction permits at a 142,800-unit annual rate, down 1% from the level of November 1999. But the rate was up 7% from the previous month, the report says, thanks to unusually good autumn weather and a drop in mortgage rates.
California Department of Finance chief economist Ted Gibson originally forecast that permits for 156,000 units would be pulled this year, but recently revised his projection down to 147,600. Builders blame the slowdown on high land prices and costly bureaucratic red tape.
Real estate experts say the state needs as many as 250,000 new homes a year just to keep pace with its fast-growing population. With no big construction boom looming, Gibson and other analysts say pressure on rental rates and home prices will remain high.
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