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Inventory of Unsold Homes Sets New Low

March 15, 1987

There were 15,116 unsold new housing units within the six counties of the Southland at the end of 1986, a new low, according to the Real Estate Research Council of Southern California's quarterly report released Thursday.

It was a drop of 29.4% below the 21,403 units outstanding at the end of 1985 and was a 3.6% fall from the previous low of 15,688 in mid-1986, due to a 41% decrease in completed units, said Michael Carney, executive director of the organization based at Cal Poly Pomona.

In contrast, he said, inventory in the form of units under construction rose 32% from mid-1986 to the end of the year.

Lower Interest Rates

"Recent low mortgage interest rates have clearly depleted unsold units that were completed and encouraged additional construction," he said.

The survey included homes in Orange, Riverside, San Bernardino, San Diego and Ventura counties and portions of Los Angeles County, but excludes, it was explained, central Los Angeles, the Westside and western San Gabriel Valley because of housing saturation in those areas.

The decrease in the number of completed units was greater for single-family detached houses--down 48%--than for condominiums and town houses, down 37%, according to the survey conducted by Market Profiles for the council.

Similarly, the increase in units under construction (up 32%) was greater for detached housing (up 37%) than for condominiums and town houses (up 22%).

New detached housing under construction rose 37% from 5,239 at mid-year 1986 to 7,175 at the end of the year, while completed and unsold units fell 48% from 2,924 units at mid-year 1986 to 1,531 units at year-end 1986.

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