DQNews Archived Article

California construction up

by Real Estate Analyst John Karevoll
January, 1997

La Jolla, CA.— Building activity in California reached its highest level in five years, providing another indication of steady growth in the state's economy, a real estate information service reported.

Construction financing totaled $10.7 billion in 1996, up 20.0 percent from $8.9 billion the year before, according to DataQuick Information Systems.

Last year's total was the highest since 1991 when construction loans totaled $11.4 billion. The low of recent years was reached in 1993 at $6.9 billion.

Building activity is an important part of local and regional economies, this money makes its way into people's pockets quickly. If current trends stay in place, 1997 should be even stronger than last year, said Mike Ela, DataQuick president.

The growth in the building sector followed other economic patterns with the Bay Area outpacing the rest of the state with a 33.7 percent year-over-year increase, and the Central Valley bringing up the rear with a relatively modest 8.6 percent increase.

DataQuick monitors real estate activity nationwide and provides information to lending institutions, title companies and industry analysts. The numbers include all construction loans, commercial as well as residential. A construction loan is typically recorded a few days before construction actually begins.

Measured in dollar volume, Wells Fargo Bank was easily California's most active provider of construction financing. The lending institution made 222 loans totaling $910 million. Bank of America was the second most active lender with 147 loans totaling $459 million and the third most active lending institution was Bank One with 58 loans totaling $455 million.

Construction financing ($Million)

County/Region       1995      1996   % Chg. 
                                                        
Los Angeles       $1,327    $1,472    10.9 
Orange County       $903      $958     6.1 
San Diego           $880    $1,083    23.0 
Riverside           $542      $636    17.4 
San Bernardino      $377      $413     9.4 
Ventura             $190      $393   107.0 
So.Calif. Total   $4,220    $4,955    17.4 
                                            
San Francisco       $148      $210    41.4 
Alameda             $401      $735    83.3 
Contra Costa        $343      $460    34.0 
Santa Clara         $688      $872    26.7 
San Mateo           $184      $296    61.2 
Marin               $184      $136   -26.3 
Solano               $98       $61   -37.0 
Sonoma              $237      $278    17.3 
Napa                 $42       $62    46.3 
Bay Area Total    $2,325    $3,109    33.7 
                                            
Santa Cruz           $43       $62    45.4 
Santa Barbara       $104      $115    10.3 
San Luis Obispo      $82      $153    85.6 
Monterey            $133      $162    21.7 
Coast Total         $362      $492    35.7 
                                            
Sacramento          $316      $409    29.5 
San Joaquin         $312      $179   -42.7 
Placer              $144      $203    41.1 
Kern                $141      $157    11.8 
Fresno              $265      $239    -9.6 
Madera               $41       $34   -17.3 
Merced               $48       $45    -7.1 
Tulare               $82       $75    -8.5 
Yolo                 $60       $80    33.6 
El Dorado            $67      $158   137.2 
Stanislaus           $86      $116    35.6 
Inland Total      $1,561    $1,696     8.6 
                                            
Other/Rural         $403      $393    -2.5 
                                            
All California    $8,871   $10,645    20.0