Economists didn't want to say it, mortgage bankers were hoping against it, real estate agents were trying to ignore it. But 1995 turned out to be a horrible year in housing for the Golden State. Home sales declined 13% during the year in California, the worst decline since 1991, according to TRW Redi Data of Anaheim, Calif.

The sales drop represents a real kick in the pants for the mortgage industry there, which had been optimistically eying 1994's increase in home sales as a sign that the state's housing market was firming up.

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