BUILDING LOANS DROP 7.5% IN VENTURA COUNTY\Downturn in real estate market may mean stall in area's recovery.

Byline: Terry Kanakri Daily News Staff Writer

Construction loans for new homes and businesses declined slightly in Ventura County last year, but at a much lower pace than the state as a whole, a survey released Friday showed.

TRW REDI Property Data reported lending institutions approved construction loans worth $147 million in Ventura County during 1995, which was down by 7.5 percent from $159 million in 1994.

The decline was much less than experienced statewide in the same time period, with reported construction lending dropping by 16 percent in California, from $8.1 billion to $6.8 billion.

TRW REDI market analyst Nima Nattagh said the drops are evidence that despite recent signs of economic stabilization, the real estate industry still has ways to go before recovering from the recession.

"Generally for Southern California, Ventura County included, volume construction lending is down and that's because of lower demand by builders," Nattagh said. "What we've seen in 1995 is that home sales figures came down. The concern about the economy, the lack of consumer confidence, and the lack of economic growth also played a role."

But Gary Gorian, vice president of land acquisition and sales for Dale Poe Development Corp., a major developer in Ventura County, said the lower county figures may be due to reasons other than economic factors.

Many developers are now financing projects with larger down payments, which in turn require smaller amounts of money from lending institutions, Gorian said.

"Builders are putting down more of their own or their partners' money," Gorian said.

Gorian added another reason for the decline of construction loans in Ventura County may be a trend toward building smaller homes, which cost less and require less money to build.

He also said a certain type of construction is catching on in Ventura County.

"Now more than ever, building and developing in Ventura County are being done so by publicly owned building companies and they are internally financed and they don't have a need to get bank financing," he said.

But the TRW REDI figures, compiled from recorded deeds, show that the regional economy is still struggling, although indicators such as lower unemployment point toward a slight improvement, Nattagh said.

And until the construction industry rebounds, the regional economy path to recovery may be slow, Nattagh said.

"Construction is a very important component of the economy," he explained. "In the overall economic health of the region, construction activity is an important element of it. Obviously, if the level of construction activity keeps going down, that basically means that the local economy will not get a boost from that important activity."

Gorian said developers are cautiously optimistic about 1996.

"We're seeing some trend that causes us to believe that we're experiencing the beginning of a recovery," he said. "We're basing that on general consumer confidence levels and home sales seem to be steadying at the least and increasing at the best. The interest rates also seem to be helping quite a bit."