DQNews Archived Article

California Building Surge

by Real Estate Analyst John Karevoll
February, 2000

La Jolla, CA.— Building activity in California continued last month at its highest level in ten years, the result of a robust economy as well as easier builder access to financing, a real estate information service reported.

Financial institutions provided $1.43 billion in construction financing last month, up 14.2 percent from $12.5 billion for January last year, according to DataQuick.

That was the most for any January since 1990 when $1.86 billion was made available to builders.

Construction financing for the last 12 months totaled $22.52 billion, up 18.3 percent from $19.03 billion for the prior 12-month period. The all-time 12-month high was February 1989 through January 1990 when financing totaled $32.23 billion. It subsequently dropped to as low as $6.51 billion for the September 1992 to August 1993 period.

"There's a pipeline here, a lot of projects just starting have been in the planning stages for a long time. There really aren't any indications of a slowdown any time soon," said Mike Ela, president of DataQuick.

DataQuick monitors all real estate activity in California and other states and provides information to consumers, 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 building activity actually begins.

While all regions in the state are seeing a rise in building activity, the current surge is strongest in the Bay Area. The financial institutions most active in construction lending are Bank of America, Wells Fargo Bank and Imperial Bank, DataQuick reported.

Source: DataQuick Information Systems

Media Inquiries: John Karevoll (909)867-9534

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