REAL ESTATE : Home Construction in 1989 Falls 32% in Orange County

Builders constructed one-third fewer homes in Orange County in 1989 than in 1988, signaling a 32% sales drop.

According to the Construction Industry Research Board, local governments issued 7,300 permits to build houses in Orange County through November. The 32% drop contrasts with the 10,700 homes built in 1988, a boom year for the housing industry.

Across the state’s metropolitan areas, the number of permits issued for houses in 1989 was about the same as in 1988. Orange County has been particularly hard hit by lower sales because of its extremely high housing prices. Fewer than a fifth of Orange County families can afford an average resale house in the county.

Permits for multifamily units--condos and apartments--were also down, the research board reported. Last year there were 7,500 permits issued, down 32% from 1988’s 11,000.

Non-residential building also was down in the county. In offices, for instance, permits for $319 million worth of buildings were issued, down 23% from $413 million in 1988. Offices in most urban areas of the state, including Orange County, are overbuilt and running high vacancy rates.

For Southern California, office construction was up 8% in 1989. Construction was up in Los Angeles and every other county in the region, except Orange County.

Retail construction was down 36% in Orange County last year, and it was down 18% in the rest of Southern California. Permits were issued for $159 million worth of retail construction last year, contrasted with $249 million in 1988.

Factories and warehouses were down only 5%, contrasted with 11% for the rest of the region. Permits were issued for $120 million worth of construction in 1989, from $127 million in 1988.

Construction of hotels and motels was also off less in Orange County than in the rest of the region. It was $74 million last year, down 12% from $85 million in 1988. For the region the decrease was 24%.