You may not face the resale market's frantic bidding wars when you buy a new home in California, but that doesn't mean it's any easier to own a new home in many areas of the state.

Lotteries and waiting lists are just as prevalent for the too few new homes as multiple offers are for the too expensive resale homes in the Golden State.

That's because California needs as many as 250,000 new homes a year just to keep pace with it's growing population. The state could only muster approximately 140,000 new homes last year, according to the California Building Industry Association.

What's worse CBIA's stated housing need doesn't account for housing demand generated by the state's job churning economy, which creates some 400,000 new jobs each year, according to the state's Employment Development Department.

California's housing crisis prompted hundreds of home builders to descend on Sacramento, the state capital, to urge policy makers to resolve problems builders say deny California's working families the American Dream.

"There is an entire generation of new Californians depending on our success in building quality, affordable housing. We have the responsibility to put the solutions on the table, to show policy makers how to clear a path for housing markets and increase housing production in California," CBIA President Jim Previti.

Previti says California has seven of the ten most expensive housing markets in the nation and builders are lobbying to tear down some of the barriers to growth that prevent them from constructing affordable housing. Their proposals, if legislated, would seek laws that allow local governments to make land-use decisions more favorable to builders who want to construct homes in urban areas.

Families earning the median California income of $44,000 need an additional $35,000 in income per year to afford the state's median-priced new home, currently listed at $225,000. The problem is significantly worse in high job-growth areas like San Francisco, where the same family has only a one-in-eight chance of finding a home they can afford, CBIA said.

The national median income is $47,800 and the national median sales price is $138,000.

In San Jose, the nation's fourth most expensive housing market, residents enjoy the nation's highest median family income of $82,600, but face resale median prices for single-family homes on the brink of costing half million dollars.

In February, preliminary data shows a median asking price of $495,000 for single-family homes and, with most homes selling for more than the asking price, the median price of homes sold and closed is likely to exceed the half million dollar mark when all the numbers are in for February, says statistician Richard Calhoun, broker of Creekside Realty in San Jose.

Inventories in Santa Clara County (Silicon Valley), where San Jose is the county seat, have remained flat for months at less than 1,000 in a community of more than 1.7 million residents.

"I do believe it will break a half million dollars for single-family homes," Calhoun said.

Statewide, the California Association of Realtors put the median price of a resale single-family home at $233,950, a 15.7 percent increase above the $202,200 median for January 1999.

Ironically, the statewide $233,950 resale median nearly matches the median cost of single-family homes in Silicon Valley back in the early 1990s.

For California to increase its home ownership rate from 56 percent to the national average 67 percent, 1.4 million more working families in the state would have to buy a home.

Unfortunately, because of the cost of housing and other factors, sales of existing homes in California in January posted a 11.2 percent decrease, according to the California Association of Realtors and Transamerica Intellitech, a real estate information service.

"Higher prices, lower inventory and consumer concerns about rising interest rates have combined to slow down the California housing market," said C.A.R. President Richard F. Gaylord.

Also See:

Published: March 3, 2000

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.