Builders in Orange County took out fewer permits for new single-family homes in November than in any single month since the real estate industry depression of 1982, according to a report released Friday.
Just 86 single-family permits were issued in the county in November, down from 509 a year earlier, the Construction Industry Research Board reported.
And several building industry observers say the dismal month does not mean the county's residential developers have hit bottom.
"We are going to see considerable slowness through the first half of the year," said Philip Bettencourt, a Newport Beach consultant and president of the county chapter of the Building Industry Assn.
"I think we need to see the standing inventory (of almost 3,000 unsold new homes) cut to a much more manageable number, and I don't think any builder is terribly aggressive now, because there is just not enough good economic news out there" to justify increased construction activity.
The 3,347 single-family permits issued in the county for the first 11 months of 1990 represent a huge 54.4% decline from the same period in 1989, the research board report shows.
Developers picked up some of the slack by building more town homes, condominiums and apartments, with permits for 8,301 attached units issued during the first 11 months, up 10.8% from 7,491 units in the first 11 months of 1989.
But that failed to halt a two-year slide in new construction activity in the county, as the total number of residential units for which permits were issued through November, 1990, fell to 11,648, 21.5% fewer than in the same period in 1989 and off 46.2% from the first 11 months of 1988.
The continuing slide "is indicative of two trends," said housing industry analyst Michael Meyer, managing partner of the Kenneth Leventhal & Co. accounting firm's Newport Beach office.
"There is a major pullback of money by banks and savings and loans, and they have been almost the sole source of construction lending for residential builders. So that alone has caused home builders to reduce their plans," Meyer said.
"There also is an affordability crisis, even though there still is a good demand for homes in Orange County, so the second trend has been to build smaller units, and a lot more attached units, as builders try to bring prices down."
Meyer said he expects to see continued slowing of new-house construction and permit applications, at least through the middle of the year, if there is a quick and favorable resolution to the Persian Gulf crisis.
If prolonged hostilities break out in the Mideast, a recovery could be much further away, he said.
O.C. RESIDENTIAL BUILDING PERMITS Issuance of building permits for single-family homes has dropped dramatically in the past year, but the number of permits issued in November for multi-family units was up from the year-ago month.
Single Multi- Month Family Family Total Nov. 1989 509 298 807 Dec. 1989 690 1,117 1,807 Jan. 1990 531 573 1,104 Feb. 1990 319 403 722 March 1990 202 1,021 1,223 April 1990 302 1,352 1,654 May 1990 354 586 940 June 1990 535 1,705 2,240 July 1990 176 455 631 Aug. 1990 117 373 490 Sept. 1990 433 668 1,1101 Oct. 1990 292 690 982 Nov. 1990 86 475 561
Source: Construction Industry Research Board