Housing: The Disaster Zone Of California
August 24, 2008
Housing: The Disaster Zone Of California
The California Building industry Association
(CBIA) within its Report California
According to the CBIA - this is the lowest in recorded history.
The
California Association of Realtors within its report for the
month of June C.A.R. June
DataQuick within its
July Report
Businessweek
reports California
To illustrate what a
"disaster zone" California is - in comparison with the
normal open urban markets of Texas - the Houston Association
of Realtors within its Report for the Month of July
The reasons why
California is a "disaster zone" are obvious - as outlined
within The Housing Bubble: The Planner's
The California Building Industry Association (CBIA) in reporting that the permits expected to be issued in that State during 2008 at 72,000 is the "lowest in recorded history" - is understating the severity of the situation - because it is not making adjustments for the underlying population bases over time. It is misleading if the population differences are not taken in to account.
California's population
With California's population base of 37,000,000 and expected residential building permits of 72,000 for 2008 - this represents a residential building permit rate of 1.94 per thousand population - very near the other "disaster zone" of the Western world, the United Kingdom at 1.6 per thousand population. These build rates are well below replacement levels - which will age and degrade the housing stock over time.
If the United
States with a population
To illustrate further - if the following countries / states had the same current annual permitting rate as California at 1.94 units per thousand population - the figures would be as follows -
Australia - 40,740 (currently in excess of 145,000 units annually)
New Zealand - 8342 (currently in excess of 16,000, down from 24,000 last year, 33,000 previous year)
Texas -
46,560 (2007
Ireland - 8,356 (currently around 50,000 had peaked at near 90,000 units).
Canada - 64,706 (Statistics
United Kingdom - 118,340 (currently at a build rate of 1.6 / 1000 - the UK with a population of 61 million is likely to get slightly under 100,000 new residential units in place during 2008. It appears incapable of solving this problem politically).
It is clear that once the "comprehensive disruption costs" (in political, social and economic terms) become obvious to the finance sector, policymakers and the wider public - that these artificially created housing bubbles will not be tolerated again.
This could be called "learning lessons the hard way".
ENDS