There's still enough housing to go around

Although the production of new housing units has been relatively low over the last three years, there is still plenty to go around. It may not be exactly what many ''house hunters'' are looking for. You might have to settle for a scaled-down version of the house you've dreamed of, or perhaps even an apartment or a condominium. Maybe you'll just stay put and improve the place you already have, or maybe move back in with the family.

Whatever your choice, you should be able to find something to hold you over until mortgage rates and housing prices become more manageable.

In other words, while there is definitely a crisis in terms of housing affordability, there is none in terms of actual housing availability.

''The housing supply is adequate,'' says Lewis Bolan, co-author of Emerging Trends in Real Estate, an annual forecast by the Real Estate Research Corporation (RERC) of Chicago.

Despite the drop-off in new housing and mobile-home construction, there has been a ''dramatic increase'' in the number of housing units added through rehabilitation, according to Mr. Bolan's report. If you can't find anything affordable in new housing, maybe an upgraded older unit will meet the need.

RERC is highly respected as an objective real estate consulting firm. The current forecast, the firm's fifth annual report, is based on interviews with more than 80 of the nation's top realty investors, lenders, developers, and syndicators.

Rehabilitated housing units are ''hidden inventory'' that are not counted as housing starts as they do not involve new foundations or footings, Bolan explains, but they are counted by the Department of Housing and Urban Development.

Between 1974 and 1981, the last year for which HUD data are available, more than 1.6 million housing units were created from existing buildings. In 1981 alone, rehabilitation and reuse accounted for 465,000 additional housing units, or nearly half of all single- and multiple-family housing units combined.

Although no data are yet available on 1982 and '83, the report says ''there is no reason to believe that rehab activity has lessened. If anything it has gone up.''

Bolan, who is vice-president of the research firm and head of its Washington office, is not as enthusiastic when it comes to single-family construction. ''The go-go years of the mid-'70s are over,'' he declares. Demand is as strong as ever, he adds. But it is crippled by the ''double whammy'' of high housing prices and high financing costs.

''Now that the recession has ended and unemployment levels are dropping, consumer confidence is returning,'' the report goes on. ''This would bode well for housing if it were not for the affordability factor.''

Because of the probable volatility of mortgage rates next year and the extent to which production is affected by interest rates, it's hard to zero in on the number of new houses to be built in 1984, Bolan says.

If mortgage rates dip to 9 percent, from about 14 percent at present - and this is highly unlikely - new housing production could return to the ''good old days'' of the mid-1970s when 2 million units were built each year. But if interest rates jump back up to 15 percent, a repeat of the early 1980s - which also is unlikely - housing starts could fall to the 800,000 to 900,000 level, he adds.

Bolan's best guess is that mortgage rates will range between 13 and 14 percent next year, resulting in 1.3 to 1.5 million new housing starts. ''Up,'' he says, ''but not dramatically.''

Bolan says he's ''bullish on the multifamily rental market,'' although there has been overbuilding in some Sunbelt cities. The vacancy rate is 12 percent in Phoenix, Ariz., and 20 percent in Houston.

Pushed primarily by developments catering to middle- and high-income tenants, he expects ''fairly significant increases'' in apartment production, largely for two reasons:

* Rental properties are easier to finance today than they have been in the past three years.

* Rents, which have risen rapidly over the last few years, have finally started to reach a level that can support today's construction costs.

''These rental increases, combined with tax benefits available to residential building owners, have vastly improved the investment appeal of existing apartment buildings and have spurred new construction,'' the RERC report declares.

Tax benefits also have helped spark the interest in rehabilitation.

Explaining the rehab phenomenon, Bolan says the country can no longer afford to throw real estate away ''like Kleenex when it's old and used.''

Residential rehabilitation is based on three components - urban gentrification of empty or underutilized houses, conversion of larger residential units into several smaller units, and conversion of office and industrial buildings into housing.

Meanwhile, home buyers' tastes are still at odds with reality. With the days of single-digit interest rates gone, buyers ''are going to have to learn to live with smaller units, more sharing of housing space, and higher proportions of their incomes devoted to housing,'' Bolan says.