New Construction Financing Hits Highest Level Since ’90

Financing of new construction in California reached its highest level since 1990 during the first part of the year, a real estate information company reported this week.

Construction financing totaled $7.86 billion for the January-to-May period, up 13.7% from the same period last year, according to Acxiom/DataQuick, which tracks real estate activity in the state.

This year’s financing total was the highest since the same period in 1990, when builders spent $10.18 billion.

The low point in statewide construction financing came in 1993, when just $2.25 billion in loans was recorded during the first five months.

Southern California’s overall share of construction loans came to $4.3 billion, an increase of 12.1% over the January-to-May period in 1998.

The figures reflect all construction loans for residential and commercial building. A construction loan deed is typically recorded a few days before work on a project actually begins, said John Karevoll of Acxiom/DataQuick.

The numbers “literally tell you how much building activity is actually going on out there,” Karevoll said.

In Los Angeles County, construction loans from January through May went up 7.3% over last year in the same period. Loans totaled $1.4 billion.

Building in Riverside County surged by 55.2%, Ventura County by 31.6%, San Bernardino by 22.9% and loan activity in San Diego County rose by 13.7% in the same period. In Southern California, only Orange County experienced a drop. Loan activity there fell by 15.3%.