BUILDING PROJECTS INCREASE : LOANS SIGNAL RECOVERY.
Construction financing in California soared to its highest level in five years during 1996, a sign that the economic recovery has finally spread to that industrial sector, a real estate information service said Wednesday.
Financing for all types of construction projects totaled $10.7 billion last year, a 20 percent increase from 1995, said Acxiom Corp.'s DataQuick Information Systems.
That's the highest total since 1991, when construction loans totaled $11.4 billion. And it's up from a recent low of $6.9 billion reached in 1993.
John Karevoll, a DataQuick real estate market analyst, said that the numbers are a good indication that new buildings are finally being built again in California.
``They fund that stuff the day before they move (on site),'' Karevoll said. ``Construction loans are more expensive than other types of loans, they are riskier, and they don't want the meter ticking until they are literally out there working.''
In what is becoming a familiar pattern of good economic news, the Bay Area is at the forefront of this rebound. The value of construction loans there increased 33.7 percent on a year-over-year basis vs. 17.4 percent in Southern California.
In Los Angeles County construction loans totaled $1.472 billion last year, up 10.9 percent from 1995.
In Ventura County they totaled $393 million, up 107 percent from the prior year.
In terms of dollar volume, Wells Fargo Bank was California's most active provider of construction financing last year, making 222 loans totaling $910 million. Bank of America was the second most active lender with 147 loans totaling $459 million, DataQuick said.
Ted Snyder, a regional vice president in BankAmerica Corp.'s commercial and real estate services group in Los Angeles, said that growth in the entertainment and high-technology sectors are fueling the expansion in Southern California.
``I'm not surprised to see those numbers,'' he said.
Chart: (Color) CONSTRUCTION FINANCING REBOUNDS
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|Publication:||Daily News (Los Angeles, CA)|
|Article Type:||Statistical Data Included|
|Date:||Feb 13, 1997|
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