HOUSING SHORTAGE LOOMS STATE'S UNSOLD INVENTORY INDEX AT 3 MONTHS.

Byline: Gregory J. Wilcox Staff Writer

VAN NUYS - A shortage of available homes threatens the strongest sector of a weak California economy, a top state economist said Wednesday.

``We have a housing crisis in California. It's called a shortage,'' Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors, told the San Fernando Valley's chapter.

During January the association's Unsold Inventory Index for existing, single-family detached homes was 3 months, down from 4.2 months a year ago.

It's even tighter in the Valley, according to figures from the Southland Regional Association of Realtors. If sales continue proceeding at January's pace, the housing stock would only last about 2.5 months, far less than the 6-month supply required by a market of the Valley's size.

And no relief is in sight from new construction on either fronts.

Young said about 250,000 new housing units are needed annually to meet demand. But only about 150,000 units were built last year. That is about 250,000 fewer units than was the norm in the mid-1980s.

That, coupled with strong demand, will help sales maintain a strong pace even amid rising prices.

``I really have good news for you,'' Appleton-Young told the Realtors. ``Los Angeles is going to do fine.''

Statewide, she expects about a 2 percent drop in sales this year compared with home sales in 2001, while the median price, the point at which half the homes sell for more and half for less, increased 6 percent.

Jim Link, executive vice president of the local group, is comfortable with Appleton-Young's assessment.

``I think the good news is that she really indicated that the economy is actually a little stronger than us noneconomists were led to believe.,'' he said. ``The situation now is lack of inventory. That's what's really holding the market from going gangbusters.''