Real Estate Conference Fails to Build Confidence : Housing: Experts deliver list of economic woes. Builders are advised to concentrate more efforts on younger, first-time home buyers.

NEWPORT BEACH — If it was good news that about 400 real estate industry executives were hoping to hear Thursday, they probably came away disappointed from the annual UCI Sumigarden Conference in Newport Beach.

For more than three hours, a chain of economists, analysts and financiers talked not of good things to come, but of problems already here.

Consumer confidence is down, environmental concerns are up, construction capital is hard to come by and the recession that some observers once said would go away by early summer now seems likely to linger through the fall.

The upshot: The Southland real estate industry can expect to spend at least six more months in the dumps before enough problems are resolved to get things moving again.

That doesn’t mean all is hopeless.

California still is one of the key growth areas in the nation--along with Texas and Florida--and that growth will sustain development for years to come, panelists said.

“We will do well, it is just that there will be substantial changes and a lot of the growth will be in the central valleys, not on the expensive coast,” said Robert Edelstein, co-chairman of the UC Berkeley Center for Real Estate and Urban Economics.

The principal reason why much of the state’s growth is moving inland is the high cost of housing in coastal areas like Orange County.

Mark Baldassare, a public opinion pollster and professor of social ecology at UC Irvine, said local builders have missed a key market segment by concentrating on expensive move-up homes for older residents while virtually ignoring the 35-and-under age group.

Baldassare referred to a recent survey for The Times Orange County Edition that found that only 40% of county residents in the 25-to-35 age group own homes, while 33% live in apartments and nearly half pay rent of more than $750 a month.

“There is a significant market there for local builders” who can provide housing that meets the needs of the under-35 group, he said. “And if their housing needs aren’t met in the Orange County market, then they will go to the Inland Empire and commute back to jobs here,” becoming part of the region’s traffic congestion problem.

But before developers can focus on lower-cost housing, they must help resolve regional problems that in part have been created by “land planning in a vacuum,” said Los Angeles attorney Colin Lennard, a land use and environmental law specialist.

The same growth that has made the Southern California area so economically successful has had “a huge impact on air quality, water supplies and transportation, yet our land development decisions are made on a piecemeal basis,” he said.

“Water boards make their decisions based only from the water perspective, and the Air Quality Management District makes its decisions from the air quality perspective, and local governments each make their decisions from their local perspective,” Lennard said.

A number of politicians and environmental activists have begun calling for a regional approach to growth planning and instead of opposing the move as one that will add a new layer of government, builders should work within the system to help develop an acceptable form of regional authority, Lennard said.