Southern California's blah housing and mortgage-originations markets have bottomed out, analysts say.

According to statistics compiled from county recorders by TRW Redi Property Data, a provider of real estate information, California's real estate market is no longer declining at a rapid pace.

"The rate of decline that we are seeing is substantially less than in 1991 and 1992," said Nima Nattagh, market analyst at TRW Redi, based in Riverside, Calif.

Sales Were Down 50%

In those two years, demand for housing in southern California dropped 14%, according to TRW Redi. During the first 10 months of this year, housing demand dropped off only 4%

Mr. Nattagh said the market had reached a point of base activity. In other words, "even if the economy [in southern California] gets worse, housing won't," he said.

How bad was it? In 1988, 330,000 homes were sold. Last year, sales were nearly 50% lower.

"That is a pretty significant drop," Mr. Nattagh said.

But California's mortgage industry has not suffered similarly. Refinances have buoyed the market. The bottoming out of California's housing market will increase purchasing activity for local lenders, Mr. Nattagh said.

Low Interest Rates Help

California's real estate turn-around would also increase the value of servicing for Golden State loans and portfolios that carry such loans, said Gary Gordon, an analyst at PaineWebber, Inc.

Mr. Gordon said a slowing of job losses and low interest rates were the main reasons for the California market's change.

Analysts said the change has affected mainly the top- and bottom-housing markets.

"I think, perhaps, many people who were holding off buying are now making the move," said Mr. Nattagh of TRW Redi.

While most analysts agree that California's housing market has bottomed out, they say that it will be some time before prices and sales volumes turn upward.

"These things never leap off the bottom," said Mr. Gordon. "Prices won't move, up for years."

"Bottoming Out means you still have another year of hell left," said E. Gareth Plank, senior vice president of research at Mabon Securities Corp.

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