PCBC Happy as the Good Times Roll : Builders’ Annual Parley Upbeat as Home Sales Soar

Times Real Estate Editor

The home builder’s lot, these days, is a happy one.

In the currently robust market for both new home and resale housing, virtual sell-outs of new home phases are a weekly occurence, even though interest rates, points for financing and prices have inched upward.

But the momentum of low interest rates this year, combined with the strong, traditional desire for homeownership, is pushing 1986 toward one of the best years in the housing industry.

The mood at the 28th annual Pacific Coast Builders Conference in San Francisco, which ended last weekend with a record paid attendance (4,600 and still counting at midweek), reflected the status of the industry statewide and nationwide.


In this good year for builders, after-session hospitality increased noticeably. Parties were plentiful, held in various hotels and locations, including the penthouse of the Fairmont Hotel.

Ironically, many builders were caught short, underestimating the strong current of demand, leaving them without products for sale or with difficulty in buying “affordable” land.

Only Few Clouds Seen

David E. Link, associate publisher and editorial director of the highly respected Professional Builder magazine and a speaker during the four-day conference, put it all in perspective when he noted that if--as expected--national building starts in 1987 and 1988 reach the 1.7 million mark, it would mean the industry will have enjoyed six consecutive years of plus-1.7 million starts.


There were a few clouds marring the brightness of the conference, which is sponsored by the California Building Industry Assn., and is the nation’s largest regional building industry gathering.

David Smith and Dale Stuard, president and vice-president/treasurer of the National Assn. of Home Builders, respectively, expressed long-range concerns for the priority of housing as a national issue, tax reform’s impact on housing and the currently tenuous status of the Federal Housing Administration’s loan insurance program.

They reported a “productive " meeting with President Reagan to stress those points before coming to the San Francisco conference. The President listened but apparently made no commitments.

Permanent Authority


Stuard, an Orange County builder in line for the NAHB presidency, citing Reagan Administration money policies for the current status of the national economy and consequently the housing industry’s leadership role, said the continuing expiration of short-term funding of FHA--requiring seven renewals to date this year to maintain the program--requires new, permanent authority to keep the “cornerstone of the mortgage process” alive and useful.

Smith foresaw a decline in multifamily rental construction, hampered by the expected tax reform legislation now before Congress. As a harbinger, during May, such construction fell by 20%, he added.

The NAHB’s veteran economist, Michael Sumicrast, cited four reasons why interest rates will remain stable--now 10.51% nationally and 10.64% in California for 30-year, fixed rates loans:

The current economy has a slow growth pattern, Japan’s relaxing of its dollar exchange rate, the dollar decline abroad is waning and monetary growth is “tolerable.”


State’s Growth Potential

He ventured that housing production nationally had peaked and would probably remain under the 2-million unit mark in starts but that California’s continuing growth potential augurs well for the state’s housing future.

Sanford Goodkin, La Jolla-based housing consultant, reminded builders of the revival of no-growth movements, this time in the Sun Belt, where delays will throw off development timing and increase costs of land and construction.

He also predicted that larger building firms will delve into the master planning of major communities.


Honors and Awards

Conference highlights included the installation of nine prominent names into the California Building Industry Hall of Fame and the 23rd annual Gold Nugget Award presentations, produced by Peter M. Meyer.

Richard Hall of Orange was chairman of the awards ceremony at the Moscone Convention Center and Stanley Swartz of San Diego was master of ceremonies at the Hall of Fame dinner at the St. Francis Hotel.

Forrest Maurer of Sacramento and Jim Beam of Orange were conference hosts as presidents, respectively of the California Building Industry Assn. and the PCBC.