CALIFORNIA HOUSING SHORTAGE TO CONTINUE IN 2007

Housing production in the Golden State is expected to remain at "normal" levels this year, with home builders producing 155,000 to 170,000 units by the end of 2007, according to the "2007 Housing Forecast" released by the California Building Industry Association (CBIA).

Approximately 70 percent of the housing permits issued are expected to be for single-family homes, while the remaining housing starts will be apartments and condominiums.Though the pace of new construction is likely to exceed production levels from the 1990s through 2001, the forecasted starts will fall short of the state's total demand for housing.

"We need to be building about 240,000 new homes, condos, and apartments a year to meet the need for housing. The problem is that we need new homes in all price ranges, and given the ever-rising fees and constraints on housing, it's all but impossible to meet the need in the entry-level market, where the need's the greatest," said CBIA Chief Economist Alan Nevin.

**Taken from the California Association of Realtors Bulletin, dated January 17th, 2007.