California News

Mar 2, 2014 6:41 PM by ASSOCIATED PRESS

Construction lag drives up home prices in Calif

LOS ANGELES (AP) - Construction on new Southern California homes is lagging and that's driving up prices for would-be middle-class homebuyers amid a reduced inventory.

Developers are still wary about putting up new construction despite a boom in prices in the past year.

Southern California's supply of new homes dropped to about 2,200 at the end of last year -- about one-tenth of what was available in 2006, just before the market collapsed.

Analysts say about 15,000 new homes will be sold this year in the six-county region, or 58 percent less than the 20-year average.

The slow investment in new homes has caused prices to freeze up after a quick recovery last year because buyers can't find a home they want at the right price.

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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