Home Builders Cheer '84 : Survey Finds Confidence Continuing This Year

Times Real Estate Editor

Southern California home builders expect the sales momentum of 1984--the best year since 1980--to carry them into another vintage year.

They feel their industry, once again, has led the California economy out of another down cycle and are confident that the pace of construction and sales will continue during 1985.

They were right in their predictions last year about "a brighter year" and in the 14th annual Times Survey of Residential Construction and Sales Activity, published today, they have high expectations for an even better year.

In the survey's index of median sales volume and projected sales volume throughout seven Southland counties, respondents' enthusiasm indicated that sales projections for 1985 will reach the 157.0 mark, the highest projected index figure since the survey began. It topped the 156.3 recorded for the high-flying days of 1978.

Participants in the voluntary survey number 141, up from 132 last year, and include builders and developers from Los Angeles, Orange, San Diego, San Bernardino, Riverside, Ventura and Kern counties. Tabulation for the index was limited to 131 firms because 10 companies did not report sales volumes for the past year.

(The Times Marketing Research Department, which created the index, considering that responding firms vary from year to year because of the voluntary nature of the survey, equates the 1971 median sales and the 1972 median sales projections--from the initial survey--to 100.0. This allows an overall trend comparison rather than a dollar-figure comparison that would not be meaningful.)

The 128.3 mark for actual sales by 131 firms in 1984 represents the fifth highest ranking among the annual surveys and translates to a median sales total of $11.8 million. The median figure for 129 firms projecting sales for 1985 was $20.1 million.

Coincident with this survey, the Bank of America released its monthly housing industry report showing a 53.7% increase in California housing starts for January, while sales of existing dwellings fell about 6%. The median price for a California house was reported as $110,987.

The report said the number of housing starts in single-family and multiple units, on a seasonally adjusted annual rate, was almost the same--119,600 and 119,300, respectively.

(Nationwide, housing starts dropped 11% in February, the largest fall in almost a year, according to the U.S. Commerce Department.

Housing analysts believe that a 68% jump in apartment construction starts in January reflected the concern of investors and builders over pending or possible changes in depreciation allowances and their consequent decision to get into production before tax laws are changed.

But there was an erratic drop of 36.7% in apartment construction in February which housing industry leaders could not readily explain.)

The William Lyon Co., Newport Beach, topped the list of builders for the fourth consecutive year. Watt Industries of Santa Monica was second and Pacific Lighting Real Estate Group, Santa Ana, was third. Others in the top 10, in order, were Coastfed Properties, Beverly Hills; Lewis Homes, Upland; Pardee Construction Co., Los Angeles; Irvine Pacific Development Co., Newport Beach; Ponderosa Homes, Irvine; Fieldstone Co., Newport Beach, and Sunrise Co., Palm Desert.

Residential sales for 1984 reported by 131 building company survey participants totaled $3,872,500,000. That was an increase of 60.5% over the 1983 sales of $2,412,300,000 for 130 firms.

Of the 131 companies reporting sales for last year, 129 gave projections for their 1985 sales. Based on their sales of $3,872,500,000 last year, these firms are looking for a 43.1% jump in sales--to $5,541,400,000 this year. Last year, the 129 firms had projected an even larger jump of 78.7% over their 1983 sales.

Eight unranked firms, with no sales to report in 1984, projected sales for 1985, ranging from $2 million for Auerbach Construction Inc., Santa Monica, to $92.5 million for State-Wide Developers Inc. of Los Alamitos.

Other Southern California building firms, particularly those whose status as public companies makes it difficult or unethical for them to predict future building plans, do not participate in the annual survey. For instance, Los Angeles-based Kaufman & Broad Inc., the state's largest home builder, reported sales of $121.1 million in Southern California last year (1,004 single-family homes) and would rank ninth on The Times list.

The 1984 leader in total units built was fourth-ranked Coastfed Properties, with 2,019 units. The firm also led in apartment unit construction with 1,899. Lewis Homes, fifth ranked, led all developers in single-family units with 971, and William Lyon, first-ranked in total sales volume, topped the field in condominium units built with 787.

There were 4,548 completed but unsold housing units in inventory at the end of the accounting year for the 131 reporting firms. Pacific Lighting Real Estate Group had the largest inventory of unsold units, 471, while 24 firms were able to hoist a "Sold Out" sign last Jan. 1.

Expressing high hopes for 1985 were 86% (111 firms) of the 129 firms reporting 1984 sales and projections for 1985. In last year's survey, 90% of 129 firms had predicted greater sales in the coming year. Bulmer & Associates, Sherman Oaks, ranked 129th this year, is expecting the largest percentage gain in sales, 5,400%.

That would be from $400,000 in 1984 to $22 million this year. Traditionally, in these annual surveys, firms with the least amount of sales in one year expect to make a dramatic jump in the coming year.

The Lyon Co., with $182.7 million in 1984 sales, topped its 1983 sales of $121.4 million. It built 1,710 units last year, 54% in single-family houses and 46% in condominiums.

A total of 36,894 units were built last year. Total construction was up 64.3% from 1983, with 10 more firms reporting in the current survey.

Single-family units totaled 16,051, or 43.5% of the total units built--the exact percentage built in 1983. Apartment units totaled 9,672, or 26.2% of all building activity, just above the 23.3% reported a year ago. The total for condominium construction was 11,171, or 30.3% of total units, compared to 33.3% in 1983.

Ninety-four companies built single-family homes, representing 72.9% of the 129 responding firms. In 1983, fewer (69.8%) firms had specialized in this category. Thirty-three firms, or 25.6%, built apartment units, compared to 25 firms or 21.6% in 1983. Condominium construction attracted 85 companies or 65.9% of all builders, up slightly from last year's 63.8%.

Of the 140 firms projecting activity for 1985, 73.6% plan some construction in single-family housing, 47.1% plan activity in apartment units and 65% expect to build condominiums. Twenty-five builders, or 17.9%, anticipate building activity this year in all three housing types.

Ninety-five of the firms participating in the 13th annual survey were among the 131 firms ranked this year. Residential sales in 1984 for those 95 repeating firms totaled $2,981,000,000, up 7.7% from their 1983 total of $2,767,400,000.

Sales increased for 71 of the organizations and declined for 23 firms and one company's sales remained the same. The 71 builders reporting increases are nearly one-third more than the 54 firm which reported increases a year ago.

The largest gainer among the 71 firms was Cayman Development Co., Rolling Hills Estates, ranked 88th this year. It showed an increase of 1,040% from its $500,000 in 1983 to $5.7 million now.

California Coast Development Group, Los Angeles, formerly Carley Pacific Inc., experienced the largest drop in sales, 84.6%, from $30.5 million in 1983 to $4.7 million last year, and Lowy Development Corp., Los Angeles, reported less than a percentage point difference, with an 83.7% decrease in sales.

Of the 95 firms participating in 1983 and 1984 surveys, 19, or 20%, exceeded their projections. Sterling Homes Corp., Irvine, ranked 53rd this year, experienced the largest gain over its projected figure--130%. It had actual sales of $18.4 compared to a 1984 projection of only $8 million. At the other extreme, Laderman & Lohr, Los Angeles, had $2 million in 1984 sales after predicting $34 million--off the mark by 94.1%.

Last year, 28,097 units were built for sale, an increase of 82.5% from the 1983 figure of 15,394 for the aforementioned 95 companies. Sixty-six percent of the firms built more units in 1984 than they did in 1983.

Alamo Homes Inc., Canoga Park, ranked 115th, had the largest percentage gain in number of units built, from one in 1983 to 24 last year, up 2,300%. Mola Development Corp., Huntington Beach, ranked 16th, had the biggest numerical gain, with 852 more units in 1984 than in 1983. Registering the largest percentage loss in number of units built from 1983 to 1984 was Lowy Development Corp., with 79.1%.

This year, 26 builders, or 19.8% of all firms participating in the survey, plan to build units equipped with active solar energy systems. A total of 3,590 such units are expected to be built; 26.8% in single-family homes, 44.2% in apartments and 29% in condominiums. GLENFED Development Co., Glendale, ranked 28th, projects the largest number of solar units, 750. It plans to use them in 300 single-family homes, 150 apartments and 300 condominiums.

Other builders this year plan to put 92 solar-energy water heaters in single-family dwellings and provide 838 solar-energy pools or spas.

A total of 707 manufactured housing units were built in 1984 by seven firms. They were Barnett & Nowling, Tustin, ranked 127th; Holstein Industries, Irvine, ranked 80th; Laderman & Lohr, Los Angeles, ranked 118th; John Lusk & Son, Irvine, ranked 30th; Ramos/Jensen, San Marcos, ranked 43rd; Stevenson Dilbeck Development Corp., Glendale, ranked 113th; Warmington Homes, Costa Mesa, ranked 13th. During 1983, five firms reported building 193 units.

This year, 1,257 units are projected for construction, according to the survey. Warmington Homes plans to build 925 units; Fine Properties Inc., Panorama City, ranked 98th, 142 units; Laderman & Lohr, 90 units; Peacock Enterprises, Santa Ana, ranked 105th, 62 units; Cendale Development Corp., Glendale, not ranked, 20 units, and Stevenson Dilbeck, 18 units.

The Ramos/Jensen firm was the only one to mention mobile home activity for 1984. It built eight units and projects 30 for this year.

As in previous surveys, many construction firms--usually the same ones--missed this year's deadline (Feb.8) for submitting data and were omitted from the rankings. Notices for participation in the survey were published starting Jan. 20 and survey letters and questionnaires were mailed at that time to more than 300 Southland firms.

Index of Median Sales Volume and Projected Sales Volume in Southern California for firms participating in the Times' 1972-1985 residential building surveys.

Sales Volume Sales Projections 1971 100.0 1972 100.0 1972 104.3 1973 97.7 1973 97.8 1974 89.8 1974 85.9 1975 78.1 1975 76.1 1976 81.3 1976 105.4 1977 142.2 1977 141.3 1978 156.3 1978 144.6 1979 151.6 1979 144.0 1980 140.6 1980 142.4 1981 125.0 1981 91.3 1982 78.1 1982 80.4 1983 96.1 1983 83.7 1984 140.6 1984 128.3 1985 157.0

Times Research Personnel Provide Technical Support

Three members of the Times Marketing Research Department provided technical support in the preparation of the 14th annual Times Survey of Residential Construction and Sales Activity, published in today's real estate section.

They are Sophie Kwan, analyst; Gladys Dushane, principal clerk, and Pat LoVerme, manager of the department.

ALPHABETICAL LISTING Following is an alphabetical listing of the building leaders included in The Times 14th annual survey, with the ranking of each:

Company 1984 Rank Acacia Construction Inc. 47 Alamo Homes Inc. 115 Allred (Douglas) Co. (The) 56 Allwest Development Corp. 76 Alpha Construction Co. Inc. 58 American National Group 110 Amir Development Co. 38 Arrowpark Investors 113* Ash Inc. 122* A & K Developments Inc. 100* Baldwin Builders 11 Barclay Hollander Corp. 70 Barnett & Nowling 127 Barratt Irvine 26 Baywood Development Group 55 Brock (M. J.) & Sons Inc. 17 Brokerage Development Corp. (The) 131 Buckingham Development Services 102 Bulmer (S. H.) & Associates 129 C.A.S. Development Corp. 120* Calif. Community Bldrs. 54 California Coast Development Group 95* Calmark Development Corp. 50* Calprop Corp. 89 Campbell (Roy J.) 124* Cantwell-Anderson Inc. 78 Carlsbad Development Corp. 124* Carlsberg Construction Co. 107* Casa Linda Development Corp. 117 Cayman Development Co. 88 Century American 57 Chandler Investments Inc. 81 Coastfed Properties 4 Coast Construction Co. Inc. 37 Colonial Construction Co. 104 Covington Technologies 29 Crestwood Corp. 92* Crismar Development Corp. 52 Cunningham-Barisic Development Corp. 87 Custom Space Builders Inc. 71* D&S;/Wrather 35 EPAC Development 42 Fieldstone Co.(The) 9 Fine Properties Inc. 98* First Financial Group 27 Forecast Corp. 66* Friedman Homes Inc. 59* Frontrunners Homes (Mayell) 92* Fucci Construction Co. 73* F & D Bowden Construction Inc. 84 G. K. Development Co. Inc. 122* Glenfed Development Corp. 28 Goldrich, Kest & Associates 20 Green Venture Homes Inc. 95* Gregory Co. 98* Griffin Homes 18 Hillside Residential Inc. 75 Hix Development Corp. 79 Holstein Industries 80 Homes by Ayres 44 Home & Country Inc. 33 Hotel Del Coronado Corp. 31 Inco Homes 48* Interamerican Builders Corp. 83 Irvine Pacific Development Co. 7 J.C.C. Enterprises Inc. 50* J. H. Hedrick & Co. 45 J. M. Peters Co. Inc. 12 Katz (S. A.) Construction Co. Inc. 86 Kirsch Co. 128 Korda Construction Co. 111* Laderman and Lohr 118* Lan Ron Builders 66* Larwin Co. 40 La Solana Corp. 64 Leisure Technology Inc. 15 Lencrest Developments Inc. 118* Lewis Homes 5 Lincoln Property Co. 14 Lindborg/Dahl Investors Inc. 82 Lowy Development Corp. 107* Lusk (John D.) & Son 30 Lycon Group 46 Lyon (William) Co. (The) 1 Manuelli & Stratton 106 Marinita Development Co. 73* Marlborough Development Corp. 24 Matson Development Co. 109 McCarthy Co. 48* McMillin Development Inc. 21 Mola Development Corp. 16 Nagel Construction Co. 65 Newport Harbor Builders Inc. 103 Oaktree Development Co. 97 Pacesetter Homes Inc. 22 Pacific Lighting Real Estate Group 3 Pacific Southwest Communities Inc. 130 Pardee Construction Co. 6 Peacock Enterprises Ltd. 105 Pennhill Co. (The) 77 Plaza Builders Inc. 61 Ponderosa Homes 8 Ramos/Jensen Co. 43 Regis Homes Corp. 25 Richwood Development Co. 63 Ridgewood Development Inc. 100* Robinhood Homes Inc. 36 Sand Dollar Development Inc. 41 Shuwa Investments Corp. 90 Spielman-Fond-Cohen Builders 62 Sterling Homes Corp. 53 Stevenson Dilbeck Development Corp. 113* Stuard & Hamala Inc. 91 Sunburst Homes Co. 34 Sunflower Development Corp. 120* Sunrise Co. 10 Torino Construction Corp. 39 Tuttle Development Co. 126 Urban West Communities 23 Valencia Co. 19 Warmington Homes 13 Watt Industries Inc. 2 Weinstock Construction Corp. 32 Weller Group 116 Wendick Development 111* Weston Communities 59* West Venture Development Co. 69 Whitehawk Partnership 68 Woodcrest Development of San Diego Inc. 94 YNY Development Co. 71* Young & Praisler Development Corp. 85

*Tie in ranking.

For The Record Los Angeles Times Sunday March 31, 1985 Home Edition Real Estate Part 8 Page 21 Real Estate Desk 1 inches; 49 words Type of Material: Correction First Financial Group Inc., Encino-based building firm which ranked 27th in the 1984 ranking of major Southern California home construction firms as reported March 24, wants to assure its inquisitive lenders that the company's year-end inventory of 144 homes--which it incorrectly reported to The Times--should have been only 14.
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