Builders see some growth in residences

California’s beleaguered housing industry received some traces of positive news from reports Thursday that showed improvement in new-home orders and single-family home permits.

Standard Pacific Corp. said preliminary new-home orders in January and February rose 40% in California from the same period a year earlier.

Meanwhile, a builders trade group reported that permits for single-family homes in January rose 18% compared with December, their first month-over-month increase since June.

The two-month gain by Standard Pacific was the direct result of what the Irvine-based home builder called a “more aggressive pricing strategy” -- deeper discounts and better incentives to lure buyers.

Overall, however, Standard Pacific said its orders for the period fell 19% compared with a year earlier, tugged down by weakness in Arizona and Florida. But, if that percentage holds for the remainder of the quarter, it would be an improvement from a 40% decline in orders during the fourth quarter.

The January-February results were “no surprise” to Daniel Oppenheim, a building sector analyst for Banc of America Securities who had forecast a 19.5% drop in the company’s orders. March, he said, would be a more telling month for order trends.

March “will set the tone for the remainder of the key spring selling season,” Oppenheim said.

Standard Pacific also reported some shrinkage in the rate that buyers were canceling orders. In January and February, cancellations fell 24% from a year earlier, which was better than the fourth quarter’s 43% plunge and last year’s 26% drop.

Also Thursday, D.R. Horton Inc. of Fort Worth said its sales were improving in California, where it is the No. 1 builder.

Alan Nevin, chief economist for the California Building Industry Assn., said traffic at new-home communities had picked up since the start of the year.

“Developers say the lights went on at the beginning of the year,” Nevin said. “People are tired of waiting to buy.”

The trend hasn’t yet been reflected in the number of permits California builders are obtaining, he added. In January, 9,798 permits were obtained, down 21% from the year before, the builders group said. Still, the number of permits for single-family houses rose 18% in January compared with December.

Builders have been scaling back production for more than a year as they work to reduce inventories of homes already in the pipeline. Permit activity is still coming off the 2005 peak, when 200,000 were issued. Nevin sees the current year hitting more normal levels of 155,000 to 170,000 permits for all types of homes.

annette.haddad@latimes.com