California new housing market looking good, Central East Coast lackluster.

PORTSMOUTH, N.H.--(BUSINESS WIRE)--June 28, 1996--California's housing market is finally looking good.

So says a new index evaluating the housing markets of 27 major U.S. metros. The Market Watch Index (MWI) appears four times a year in the Portsmouth-based publication Homebuilders' Advantage. Partners and editors Jody Kahn and Ann Wade calculate the MWI using the number of new jobs as a stand-in for housing demand, while residential building permits represent supply.

"An MWI of 1.2 new jobs for every new home built is normal for most markets; below 1.2 suggests housing is overbuilt and over 1.2 implies unmet demand," said Kahn.

According to renowned industry analyst Sanford Goodkin, a partner in the publication, "I believe we are the first to publish this type of comparison for most of the major metros on an ongoing basis."

The Market Watch Index (MWI) for the 12 months ended March 31, 1996 (using the most current preliminary statistics available), showed California's housing market revitalizing due to low levels of new building and strong job gains.

Los Angeles had the highest MWI for the 27 metros monitored. The metro's stellar new job growth (77,200 this period vs. 42,300 the previous period -- +83 percent), combined with less than a 1 percent increase in permits pushed L.A.'s MWI from 5.07 to 9.21. That means for every 9.21 new jobs, only one new house was built.

San Diego gained 16,800 jobs vs. 5,400 the previous period (+211 percent) paired with a nearly 10 percent decline in permit activity, for a 2.35 MWI.

Orange County's MWI increased from 1.91 to 2.42. The area gained 21,000 new jobs which was down from 23,400 last year (-10 percent), but a 29 percent permit drop bolstered its MWI.

Sacramento gained 20,700 new jobs, up 9 percent over the previous 12 months, while permits dropped by 2 percent, raising its MWI from 2.26 to 2.50.

San Francisco's 71,200 new jobs far exceeded its 2 percent permit increase, causing its MWI to jump to 4.07 from 2.86 last year.

Declines: Philadelphia plunged from 1.77 to -0.76 as it lost 9,700 jobs. A 13 percent permit decline wasn't enough to achieve MWI equilibrium. Similarly, Washington, D.C., declined from an MWI of 1.61 to 0.79 as job formations slowed by 56 percent, but permits declined only 10 percent.

Raleigh-Durham, N.C., slipped from a 1.08 MWI to 0.93 as the number of new jobs slowed from 16,000 to 13,100 (-18 percent) but permits declined by only 5 percent.

In Florida, Orlando's MWI plunged from 2.16 to 0.89 as job formations dropped much faster than permits. Although all saw gains, the rate of job growth declined in all four Florida metros covered; only Miami had a comparable drop in permit activity allowing MWI stability.

Also in the current issue of Homebuilders' Advantage:

-- An inside look at a cutting-edge financing structure which

allowed mid-sized homebuilders to access Wall Street and how

other builders will benefit;

-- How to make builder co-ops work; and

-- Free on-line housing permit data sources.

Homebuilders' Advantage can be contacted at 603/430-2839.

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NOTE: Graphic showing MWI numbers for metros available.

CONTACT: Homebuilders' Advantage, Portsmouth

Jody Kahn, 603/430-2839

74444,[e-mail]