Things Not Looking Good for California Housing Slump

( – California’s slowdown in home construction has left many people concerned about the housing market within the state. With fewer homes being built, there is a possibility of housing prices skyrocketing.

The president of California Landmark Group, which is known for their luxury apartment complexes, said that he is feeling the housing market crisis. Ken Kahan, the president, says “We have pulled back” and cited metrics that show business has been challenging.

It’s becoming difficult for California developers to get a profit off of projects due to local regulations mixed with material costs and rising labor costs. The interest rates are also making it difficult as developers have to put up more money in order to finance their projects.

In particular, single-family homes for sale and multifamily units for rent are seeing predominant decreases. Dan Dunmoyer who is president of the California Building Industry has said that a lot of the decline is because of cautiousness from for-sale home builders. They were worried about a market downturn but builders were surprised when that’s not what happened following high mortgage prices.

Single-family home sales are seeing a bit of an increase but multi-family homes are not seeing the same effect. It’s been said by experts that this is a common trend across the United States as many investors are not too keen on apartments.

Particularly in Los Angeles, California developers are facing an additional issue when they are dealing with Measure ULA. Essentially this is referred to as “mansion tax” and it’s a tax added on to properties that are sold for more than five million. Developers are looking toward the future but they are wary of rising costs and uncertainty in the market.

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