California New Homes Used to be Hard to Come By!

Maybe this will help you remember how it was not so long ago; when the market was at the mercy of the sellers, and buyers could do very little to change that.

A little over two years ago the resale home market in California had a frantic air about it with bidding wars and disappointed potential buyers, but it didn’t necessarily follow that purchasing a new home in California was all that much easier.

In the Golden State, it wasn’t just the most extravagant areas such as Beverly Hills resale homes that had extensive waiting lists, multiple offers and lotteries - they were also to be found across the California new homes market.

The reason for this past jostling and pushing to buy California real estate is very simple: supply and demand. There were simply more people wanting new homes in California than there were new homes being built.

Just to keep pace with demand and the growing population, in most California counties, the state of California needed a quarter of a million new homes each and every year. According to the California Building Industry Association (CBIA), there was a shortage of new homes being built; in fact one year only a mere 140,000 new homes were completed.

So clearly, with an average annual shortfall of roughly 100,000 homes, there could only be two results - increased prices which lead to disappointed potential buyers. California new home buyer satisfaction and increasing population numbers weren’t the only problems facing California’s real estate market; as we would soon learn with the national reports of deceleration in housing market sales.

According to the CBIA, the was also additional pressure on the demand for housing, created by the state’s massive new job market, which annually produced around 400,000 new job opportunities. These jobs didn’t just bring in new residents to the state; they also created wealthier existing residents who wanted to become California new home buyers.

This crisis in the California housing market prompted, not dozens but hundreds of, home builders to descend on the state authorities, demanding a relaxation of the red tape required to build much-needed new developments within the Golden State.

California still boasts 7 out of 10 of the nation's most expensive housing areas and at the time builders were demanding that some of the obstacles to construct new homes in California, particularly in the affordable housing markets, be relaxed.

There was a genuine need for lower-priced new home construction as the average income in the state of $44,000 only equated to around 60% of the cost of average Californian new homes for sale. So the California home builders were demanding more favorable decisions regarding land-use within urban areas.

In some areas of the state, the problem was particularly acute, such as in the San Francisco Bay area, where a family on an average income only had a 15% chance of securing a home that they could actually afford.

At the very least, there was concern and a sense of need to shift the position of state authorities regarding the California new homes and urban real estate markets, to try and stop the ever-widening gap between income and low-cost housing within the Golden State.

If only we could wind-back the clock… to a time where our main worries and concerns aren’t about housing market woes and national recession; but where we were more concerned about finding an available home due to the lack of new homes available.