The Washington times., 1920-06-26
Washngton Real Estate Values On Sound Basis


nancisr men are OF the opinion mat
costs are not going much higher. They
are aiso OF the opinion that they VIII
decrease-but over a long period OF
years. And this will mean nothing 10
the man who contempistes buying OF
building a home. because the pur-
chasing power OF his money VIII re-
main practically the same. IN MS
home costs him $4,000 10 build today
and his wages are $4,000 year his
home will not decrease In value 10
$4,000 until his wages shrink TO sf.ooo.
The two will decline together. II they
do decline, and little Is To be gained
by sitting back and waiting for any
such uncertain decline.
THE RISING COST.
with one of washington's more
prominent builders l visited a number
OF homes In the course OF construc-
tion in northwest Washington. yes
terday. These homes are being buih
to sell for approximately $4,000. The
same builder erected several iden-
tical homes on another street little
over one year ago and sold those
homes for $4,000. In design. In ma
terials used. ad In finish the two
homes were Identical. After inspect
fnS the ne snOWtu Int
books and ] was surpried to learn
that this builder is making consider
ably less money today selling this
house for $4,000 than he made year
ago selling the other house for 10000.
But the law OF averages takes care
OF these things. This builder must
charge more for his homes today be-
cause he pays his artisans more
money. The buyer can afford to pay
more for these homes today because
he. too. in turn. is receiving a higher
salary. The value of these homes
will not shrink until their owners
salary decreases-if that time ever
comes.
STABILITY OF BUYERS.
There has been some question of
the ability of buyers to properly
finance the purchase of. a home at
present prices. There has been some
question of the permanency of real
estate sales made during the past
three years of rising costs. Some
have wondered whether the POSSIBLE
ity OF a declining market may not
cause many purchasers to unload
their homes on the market with a re-
suitins drop In real estate prices.
Such an eventuality is hardly like
ly. There have been thousands OF
real estate sales consummated in
Washington during the past three
years. Yet each sale. as an individual
transaction. has had to be on a solid
and substantial basis. or 1t could
never have been effected.
Comparatively few homes are
bought for cash. The great major
ity of home owners are those who
make an initial deposit and then nm
ally acquire title to their property BY
the payment OF the balance over a
term of years. When every sale of
this character Is made II Is necessary
that mortgages. usually two. be is
sued against the property. The pur-
chasers of these first and second
mortgages Is ample and sound. II
action of record, are scrupulously
careful that the security behind the
mbortEages is ample and sound. IL
the purchaser of the property is ex-
cptionally unsound, IL the initial cash
payment made on the property is ex-
ceptionally low, the mortgages can
not be marketed and the deal cannot
be consummated.
For this reason ii has been custom
ary. almost necessary, for real estate
dealers the past three years. Except
in one or two instances where the
builders. through extensive financial
connections have been able to OFFER
unusually reasonable trims. 1t has
been almost impossible for three
years to sell home in Washington
for less than 81 900 cash.
For this reason 1t IS entirely un-
likely that there Will be very many
Washington home owners anxious to
put their property on the market at
any considerable sacrifice. When a
man invests $1,000 cash in a home of
his own and makes his regular month
ly payments over any period of time,
he will be very unwilling to part with
this money without a considerable
struggle.
One of the most encouraging bits
Of evidence that there will be no
dumping of property on the market
during the next few years Is the ex-
perience of real estate men here in
the past. 1 have asked approximately
thirty real estate dealers how many
homes sold by them have come back
on their hands to be re-sold at auction
during their entire business expert
ence. These men. whose experience
extends from ten to forty years, could
recall but three or four such instances
in their entire business experience.
This is clearly indicative of the as
sistance rendered builders and real es-
tate men here to purchasers OF homes.
1t is logical to believe a great many
Of these purchasers at times were
compelled to fall behind in their pay
ments on their homes, and it is proof
of the integrity Of the builders and
real estate men that these people were
carried over their periods of tenn
porary financial embarrassment and
permitted to continue payments on
their homes.
Nothing is ever gained in the forced
sale of real estate. The purchaser,
builder and agent all lose in an aucr
tion sale. They all endeavor to
avoid such a sale in every possible
way. 1t is sound business that they
should. The evidence-of the past
convinces the most skeptical that this
will always be their attitude. No,
there will not be any general dump
ing of property on the Washington
real estate market in the near fu-
ture. Such condition cannot come
to pass. as everyone will believe who
takes the trouble to investigate con
ditions here.