Historical View of Housing Market

Your March 22, 1990, article entitled “Housing Sales Slowing, TRW Study Indicates” was flawed. By focusing on the relative “highs and lows” in the month-by-month market since 1988, the article paints a dismal (and) distorted picture of what is still a very strong market.

The new-home housing market peaked in 1988, one of the strongest years in Orange County’s history. In 1989, building permits issued reflected the builders’ realizations of a peak market and were down 30% from 1988. The market, however, remains strong. A historical perspective provides a more accurate, complete and positive picture.

In mid-1982, at the height of the recession, there was an unsold inventory of 6,633 new homes on the market. That was a slowdown. In January, 1990, however, there were less than one-third of that number--2,090. Furthermore, of that inventory, 86% were units under construction! This means that many of those were not ready to be sold.

The article compared 420 new home sales in February, 1990, with 593 new home sales in 1989. The use of such small numbers makes the error potential in comparisons great.

Taking into account Orange County’s housing history in the ‘80s, there is just one conclusion to be made: While the Orange County housing market may experience cycles from time to time, it is and will continue to be one of the strongest in the state and nation.

CHRISTINE D. REED

Executive Director

Building Industry Assn.

of Southern California,

Orange County Region

Send letters to Orange County Business Editor, Los Angeles Times, P.O. Box 2008, Costa Mesa, Calif., 92626. Please include full name, address and phone number.