REAL ESTATE : Darkness May Bring a Rosy Dawn for Surviving Builders

The storm clouds that have hovered over the residential development and sales industries for the past two years are probably going to have a silver lining for builders and realtors who don’t succumb in these rough times.

Part of the bad news, of course, is that there are relatively few new homes being built these days--a result of recession, buyer revolt over the record high prices of the late 1980s and the credit crunch stemming from the collapse of the nation’s S&L; industry.

That, in turn, has depressed housing prices--good for today’s buyers but a lousy situation for builders and sellers.

In Orange County, according to the Meyers Group, a Newport Beach marketing and consulting firm, the median price of a new home dropped 11% to $134 a square foot in the second quarter of this year from $150 a square foot at the top of the market in the fourth quarter of 1989. Declining new home prices have also forced prices down in much of the resale market.

But the lack of new construction means that the supply of single-family housing is drying up, and that, says a top analyst for Arthur Anderson & Co., means that sagging home prices are probably going to recover during the next year.

“With little recent construction, the current housing supply in many parts of California is down to only several months,” according to Andrew S. Kane, western region director for the big accounting firm’s real estate services group.

“Unless the laws of supply and demand are miraculously suspended, the vanishing supply of residential real estate will create upward pressure on home prices.”

Kane suggests that Southland home values will increase as much as 20% by this time next year.