Sales volume of new housing construction throughout Southern California hit an all-time high in 1986, and the area's home builders foresee another boom year.
Results of the 16th annual Times Survey of Residential Building in Southern California, measured by an index of median sales and projected sales volume, place the 1986 mark at 260.9 for sales and 213.3 for anticipated production during 1987, new records for the index created in 1971 with 100 as the base figure. Attractively low mortgage interest rates, assurances that first- and second-home interest payments would be tax deductible and a robust move-up buyer market spurred sales throughout the Southland, encouraging principals of more than 150 firms to predict a 29% increase in sales this year. Coincidentally, the U. S. Commerce Department last week indicated a strong continuance of sales activity nationwide.
Traditional sales volume leaders in the annual survey--Watt Industries of Santa Monica and the William Lyon Co. of Newport Beach--were topped this time by CoastFed Properties of Beverly Hills, apartment construction specialists, claiming $328 million in total sales volume last year with construction of 3,286 apartment units, 103 single-family homes and 33 condominiums.
CoastFed ranked second in the 1985 survey with $271.6 million in sales. Its apartment construction represented 96% of its output while single-family homes represented 3% and condominiums, 1%.
(See Building Leaders and Alphabetical Listing columns on this page.)
In the most popular housing category, the single-family home, the third-ranked Lyon firm reported construction of 2,127 dwellings as representing 53% of its total output last year. Although Fleetwood Enterprises of Riverside--ranked 57th--reported construction of 2,295 homes, they were all manufactured housing units, but it indicated the growing strength in that market segment.
Lyon had the largest numerical gain, with 2,307 more units built in 1986 than in 1985, for a total of 4,072 units in all construction last year.
Second-ranked Watt Industries was the leader in condominium construction, reporting 564 such units, 29.5% of its total activity for last year. It built 1,214 single-family homes, accounting for 63.5%, and 135 apartment units, 7.1%.
Lyon built 1,657 apartment units, representing 41.3% and 288 condominiums, 5.7%.
The 1986 survey attracted the largest-ever participation in both number of respondents to the voluntary survey and in the ranking list.
Builders throughout Los Angeles, Orange, San Diego, Riverside, San Bernardino, Ventura and Kern counties participated voluntarily in the annual house counting. Three Santa Barbara-based companies also participated but submitted data on their construction only in the seven-county survey area.
Of 173 survey forms returned (up from 154 last year), 164 reported sales for 1986, compared with 144 in 1985.
Sales totaled $7,424,500,000 (rounded figures) among the 164 firms, also ranking as the highest dollar amount in the history of the survey. A year ago, the figure was $5,523,700,000 for 144 participating firms.
(The latter figure reflects the revised total in the 15th annual survey, necessitated by a correction made in data originally submitted by the Lincoln Property Co. of Huntington Beach. Incorrect data had dropped the firm from 14th place in 1984 to 143rd place in 1985--next to last. Sheepish company officials said six zeroes had been omitted in the survey form. In the current survey, the company ranks fourth.)
Of the 164 firms reporting sales for last year, 158 offered projections for their sales activity this year, forecasting a 29% increase in sales, which would top the $9 billion mark.
Of the 158 building firms reporting sales and projections, 85.3% (138 companies) predict an increase, up slightly from 84.9% of 118 companies expecting increases in last year's survey.
The Ed Krenz Corp. of South Pasadena, ranking 163rd--next to last--foresees itself gaining in sales this year by a huge 937.5%, moving from its 1986 sum of $800,000 to $8.3 million. The third-place Lyon Co. predicts the largest dollar increase, $124.6 million, from $305.5 million last year to $430.1 million this year.
The 68,629 housing units built last year by the survey participants was an increase of 31.8% from the previous count and showed 20 additional firms reporting building activity.
Single-family units totaled 32,033 in 1986, or 46.7% of all housing constructed, an increase of 42.6% over 1985. A total of 125 firms (76.2%) built single-family housing, up from the 98, or 70.5% from the previous survey.
Apartment units totaled 27,442 or 40% of all activity, an increase from the previous figure of 34.9%. Sixty-two developers (37.8%) reported constructing apartment properties, compared with 51 firms or 36.7% in 1985.