State’s Housing Lead May Slip
Housing, by any measure, is a matter of prime interest--in terms of money, shelter and the strong desire to own a home.
As expected, California led the nation in new home construction and sales of existing houses in 1987.
The escalating slow-growth movement throughout the Southland, however, may have a significant impact on what happens next year in the number of housing permits issued, housing starts and actual construction of new homes.
That issue is increasingly apparent and is obviously becoming a vital ballot issue. The current market, however, in its traditional home-buying period of the year, reflects the stability predicted earlier by most builders and developers for the remainder of this year.
Interest rates, both nationally and locally, are now well over the 10% mark for 30-year fixed-rate mortgages and just under 8% for adjustable mortgages, rates that seem to be quite acceptable for many buyers.
U.S. Commerce Department data released last week showed a sharp increase during March, the second consecutive month, for the key element in the housing industry, the single-family residence. At the same time, it verified all predictions that apartment house construction would drop dramatically this year, having had its tax shelter props whisked away by provisions of the complex and confusing new tax reform.
According to the Commerce Department, multifamily housing construction fell to its lowest level since the recent recession. The fall measured 12.3%, to an annual rate of 358,000 apartment units, equaling June, 1982 figures.
Also, there are expectations for increases in the mortgage rates “slowly but surely” as the year wears on, warns Paul Havemann, vice president of HSH Associates, Riverdale, N.J., mortgage information publisher.
“Realtors and lenders in many parts of the country tell us that business is not doing well . . . and this is the prime season. That will have some ameliorating effect on mortgage rates,” Havermann said. But he added that current mortgage rates are well below the averages that existed at the first of the year.
Looking at 1987 housing construction statistics published in the April issue of Carpinteria-based Automation in Housing and Manufactured Home Dealer magazine, California topped the field in housing starts with 250,209 units, representing 16.2% of all production within the top 10 states’ 889,291 starts. The national total was placed at 1.53 million housing starts.
In the existing-home category, California recorded 507,000 sales, representing 13% of the 2.2-million dwellings sold in the 10 top states last year, when national sales totaled 3.88 million.
Among states with the largest mobile-home shipments, based on the Housing and Urban Development code, California ranked 7th, producing 9,651 units, or 4.3%, of all production among the top 10 states. Florida was first, with 25,865 units, representing 11.5% of all such shipments among the leading 10 states, and North Carolina was just behind, with 22,699 units, for 10.1% of the total among leading shippers. Nationally, 225,617 units were shipped.
All of this means that 5 million families, of varying sizes, bought a new home or moved into an existing dwelling last year.
In the “if” department, Ira Gribin, Encino-based realtor and president-elect of the National Assn. of Realtors, estimates “that as many as 2 million more young households would have been able to achieve their dream of home ownership last year if the nation’s home ownership rate had remained at its strong 1980 level.
That would have represented a 40% jump in total home sales, a great dream for buyer, seller and broker.
