Economy Watch: The Housing Market

Despite the current slump in the Southern California housing market, a new study by TRW REDI Property Data predicts a brighter future as market conditions for new homes are expected to improve as early as 1994. The survey also hints at a more balanced supply-and-demand ratio by the end of the year.

Supply and Demand With the exception of Orange County, the number of new single-family homes being built in Southern California has out-distanced purchases. That trend is beginning to reverse. The cut back on construction projects, coupled with the credit squeeze over the last two years is bringing an equilibrium to the housing market. By the end of this year, it is anticipated that the demand for new homes will exceed the supply. Los Angeles (In thousands) Orange County (In thousands) San Diego (In thousands)

Riverside/San Bernardino Completed Purchased 1987 30,100 21,500 1988 34,400 26,754 1989 38,500 31,906 1990 31,200 21,794 1991 17,600 12,897 1992* 10,200 10,900

Ventura Completed Purchased 1987 4,300 2,579 1988 3,700 3,226 1989 3,300 2,691 1990 1,800 1,652 1991 1,200 1,274 1992* 700 1,000

* Estimate

Source: TRW REDI Property Data Researched by DALLAS M. JACKSON / Los Angeles Times