The Washington times., 1920-11-20
.SEESuTTLE HOPE
OF CHEAPER HOUSES
Realty Journal in New Jersey
Advises Public Not to Ex-
peCt Low Prices.

When will the maximum price TOT
homes be reached? asks the League
the official journal OF the Real Estate
League Of New Jersey.
This is a great economic question
which we doubt very much can be
properly answered by the Leading
economists and fnanciers OF the day.
In our opinion there are certain types
OF houses which at the present time
are underpriced. inasmuch as IL would
cost more today to produce them than
the present asking price. and surely
this applies particularly to new houses
Just completed or about to be com
pleted. supply and demand regulate
price In any market, no matter what
the commodity may be. The demand
for houses is far In excess OF the pres
ent supply today. and no DOUBT VIII
be for years to come.
FINANCE IS OBSTACLE.
at seems that the crux OF the situa-
ton Is one OF finance. Assuming he
builders could get material and labor
with which to build, from what source
or sources IL the money coming IL
IL only logical to believe that those III
control OF mortgage funds az they
were lending at alb would rather
lend on houses already erected, where
the cost OF construction Is determined
than on a new operation which IL I'M
certain as to the time OF completion
and value upon completion.
This means that the supply OF
homes will necessarily be kept low,
and prices maintained, II not IN
creased. In other words, suppose
"a nrnrnnI
even one third the normal rate. Isn't
it only logical to believe that the
cost OF all building materials, includ-
ing labor. would takc jump in price
due to the demand. and the cost OF
construction would increase to such
a point that the houses now offered
would be cheap at the present prices?
1--WE are willing to admit that II We
were to build enough houses to Hood
the market 1t might break prices. but
finances are not in such shape. nor
material and labor. TO permit this.
Since the war the order Of things has
changed. so much so that builders
and those who finance builders build
houses on a more scientific basis. and
In our opinion. will always keep the
supply a little under the demand in
order that houses will be sold after
erected and not rented. We do not
believe for years TO come builders VIII
undertake or be able economically to
build houses that can be rented as
before the war.
COST OF BUILDING.
"Our information Is that the cost of
building an ordinary six-room air
light house would run from IS, 800 to
70 l. .i.,ey
these figures are correct. 1t would
be necessary to obtain a rental on
basis of at least 10 per cent on the
cost. which would be approximately
$500 to 5000 q year. or $65 to $15 per
month rental. Can you imagine the
ordinary person, heretofore paying
S25 to S35 per month for a similar
house, paying such a rent as sos to
ST5
Brokers should urge their pros
poets not to expect lower prices, but
to buy a home now. No doubt we all
have had prospects who would rather
pay a high rent than buy at what
they consider the present high prices.
Let us consider the value OF the
dollar should the price Of real estate
decrease.
1--WE contend it is better to buy
now, even though the price Of real
estate was to drop. than to rent.
Brokers must not consider the
present market an inactive one. for
1t is not due to the lack of demand to
buy. but rather the inability to f.
nance buyers. Out Of every ten de-
string to buy only one can buy be-
cause of tn condition. However, In
spite of this we believe within
short time practically all Of the new
and other vacant properties will be
sold due to the tremendous shortage