Four records were set in The Times' 15th annual Survey of Residential Construction and Sales Activity, indicating the strength of the housing market throughout Southern California.
The highest number of builders--144--were ranked in the survey from among a record 154 respondents whose 1985 sales volume reached 189.1 in the index of median sales, while sales projections for this year hit the 195.3 mark.
The 1971 median sales and the 1972 median sales projections--both from the first survey--equal 100 and provide the index for annual comparisons. (See chart.)
Sales in 1985 represented a 47.4% jump over 1984, and anticipated sales this year represent the highest projected index since the survey began. The previous high was 157 in 1985.
FOR THE RECORD - Zeros Added, Firm Moves Up
Los Angeles Times Sunday March 23, 1986 Home Edition Real Estate Part 8 Page 2 Column 1 Real Estate Desk 6 inches; 189 words Type of Material: Correction
For the first time in the 15-year history of the Times' annual Survey of Residential Construction and Sales Activity, there is an asterisk winner among the top home-building firms in Southern California.
Lincoln Property Co., based on figures submitted on the survey form, had tumbled from 14th place in the 1984 ranking to 143rd place in 1985--next to last--in the survey results published here March 16.
A chagrined company official told The Times on Monday that data reported by the Huntington Beach firm was incorrect, having omitted six very important zeroes.
Actually, he said, citing an embarrassment of riches, Lincoln had sales of $229,100,000--not $229,100--in housing units sales last year, and predicted its 1986 sales projection to be $169,900,000--not $169,000.
The corrected figures would rank Lincoln in third place--with an asterisk--ahead of the William Lyon Co. of Newport Beach, survey leader for four consecutive years, which reported $204.7-million sales for 1985. The 2,962 apartment units built by Lincoln represented its total construction output, making it the survey's largest apartment builder.
Watt Industries Inc. of Santa Monica, with total sales of $283.5-million, and CoastFed Properties of Beverly Hills, with sales of $271.6-million, headed the list of major builders above the $200-million mark.
Builders, through the data submitted in the voluntary survey and in their comments, expect a continuation of the upward trend throughout the seven-county survey area of Los Angeles, Orange, San Diego, Riverside, San Bernardino, Ventura and Kern counties.
Significantly, information for the survey was submitted about a month before interest rates dropped dramatically, breaking into the single-digit zone for home loans and spurring activity in home sales.
Since early March, fixed-interest rates have slipped under the 10% mark, creating a flood of inquiries to lending institutions by persons interested in buying or refinancing homes.
Lender representatives said some loan processing personnel had backlogs of as many as 200 phone calls.
One builder described his expectations for this year as "controlled optimism." Almost all comments attached to survey forms were upbeat and very positive about the housing market for the remainder of this year.
For some firms, 1985 was their best year ever; others indicated it was a solid year of business and speculated that this year might be better--"rosy through at least the third quarter."
Reflecting some caution, 139 of the 144 ranked firms that offered projections for sales during 1986, predicted an increase in sales of 29.4%, compared to the 43.1% gain hoped for last year by 129 company spokesmen.
Residential sales totaled $5,294,800,000 for the 144 firms. That was an increase of 36.7% over the 1984 figure of $3,872,500,000 for 131 builders.
Watt Industries Inc. of Santa Monica, headed by veteran builder-developer Ray A. Watt, was first, with 1985 sales of $283.5 million. In last year's survey, the firm ranked second behind the William Lyon Co., Newport Beach, survey leader for four consecutive years.
Lyon dropped to third place in the present survey with a sales volume of $204.7 million, behind runner-up CoastFed Properties of Beverly Hills, which had $271.6 million in sales. CoastFed was ranked fourth last year.
Watt had 1984 sales of $173 million and exceeded its 1985 sales projections of $250 million by $33.5 million. The company built 1,878 units last year; 45.4% were single-family dwellings, 33.2% were condominiums and 21.4% were apartments.
Of the 139 firms reporting 1985 sales and 1986 projections, 84.9% (118 firms) expect an increase in sales volume this year, down just slightly from the 86% of 129 companies in last year's survey which expected increases.
Brookshire Homes, Newport Beach, 141st in the ranking, is anticipating the largest percentage in sales--1,671.4%, from $700,000 (rounded figure) in 1985 to $12.4 million this year.
CoastFed Properties, ranked second, expects the largest dollar volume increase, $110.4 million, from $271.6 in 1985 to $382 million this year.
During 1985, 139 builders produced 52,086 housing units. Five of the 144 firms reporting sales for 1985 did not build any units during the year but sold previously built homes. They were Casa Linda Development Corp. of Long Beach, ranked 142nd; Colonial Construction Co. of Pasadena, 138th; Cottage Development of Fullerton, 135th; Manuelli & Stratton of Sierra Madre, 143rd, and Tuttle Development of Costa Mesa, tied for 138th place.
Total 1985 construction was up 42.2% over 1984. Single-family units built last year reached the 22,188 mark, representing 42.6% of the total which was down slightly from the corresponding rate of 43.5% reported in 1984.
Fleetwood Enterprises of Riverside, ranking 44th, reported the largest number of single-family homes built--1,837--but they were all manufactured housing units. Kaufman & Broad Development Group of Los Angeles, ranking seventh, built 1,247 single-family homes, representing all of its output. (Kaufman & Broad had only participated once before, in 1977, when it ranked 17th as Kaufman & Broad Homes Inc.
A total of 98 firms built single-family homes, representing 70.5% of the 139 firms with any building activity last year, compared with 72.9%, or 94 firms in 1984.
While ranking 143rd--next to last in sales for 1985--Lincoln Property Co. of Huntington Beach was the leader in apartment unit construction, with all of its production in such units totaling 2,962.