Forecasts predict end of slump; news isn't great for homebuyers.

University of California, Berkeley has released an economic forecast that predicts the state's real estate market may soon rebound from its current slump.

The report, "California Real Estate Opportunities in the 1990s: Is California still a good place to invest?" predicts 740,000 new residents will move to California by the year 2000. Combined with the residents who move out of their parents' homes into their own, the two groups will create the need for another 2 million to 3 million houses. Business tenants will need another 180 million to 230 million square feet of offices, and industries will demand 250 million to 500 million square feet of space.

The author of the study is John Landis, an associate professor of city planning at UC Berkeley and an associate with the school's Center for Real Estate and Urban Economics. Landis predicts San Diego County will need 7.5 million to 12 million square feet of new offices, and 8.5 million to 21 million square feet of industrial space by the end of the century.

Even as the study is circulating, Landis is revising his predictions downward because of all the financially troubled real estate projects lenders haven't listed.

"The office market is going to stay weak for longer than I originally thought, due to the consolidation in the financial services industry," Landis said.

Although he predicts more construction, Landis doesn't know who will finance it.

"There's a sense in the real estate community that the banks are over restrictive, but they don't realize how many non-performing assets the banks have that haven't been listed," Landis said.

Landis hears that real estate investment trusts may be created specifically to provide short-term construction financing. Insurance and pension funds are looking seriously at construction financing because it offers higher yields and ties up funds for shorter periods, he said.

But the easy money days won't return. Landis said lenders want developer borrowers to put their own money into their developments and have solid tenant commitments before they will lend money.

"A lot of developers have been looking overseas for money and they aren't having much luck," Landis said. "They're not used to working with lenders who ask them to show how their project will work or what the vacancy factors are in the submarket where they plan to build."

Nevertheless, Landis predicts the real estate industry will slowly rebound.

Meanwhile, a separate roundtable of California real estate experts predicts the recession is already over but recovery will take time. They say that high prices will keep many Southern Californians from buying their own homes.

In "The California Five-Year Housing Forecast," eight California real estate experts predict a shortfall of 150,000 apartment units and houses between now and 1995. From 1995 to 2000, the forecast predicts the shortage will top 300,000 units and could go as high as 500,000. Affordable housing shortages for lower income families will be disproportionately high.

Investors can look forward to better times. The eight experts say the homebuilding industry won't find financing solutions for at least another two years. As such, prices will rise.

The forecast predicts that by 1996 the statewide average new home price will jump 20 percent to $275,000. At the same time, the average size of homes will shrink and drive the new home cost per square foot up 35 percent by 1996.

Forecast roundtable participants included:

* Austin G. Anderson, president, Economic Research Associates, Los Angeles 

* Alfred Gobar, president, Alfred Gobar and Associates, Brea

* Sanford R. Goodkin, president, Goodkin, Kahn and Associates Inc., San Diego

* Gadi Kaufmann, managing partner, Robert Charles Lesser & Co., Beverly Hills 

* Jeffrey S. Meyers, president, The Meyers Group, Encino

Hathcock is real estate editor of the San Diego Business Journal.