Evening star., 1924-06-28
BY ROGER w. BABsON.
Special Dispa tch IN The St.r

Special Dispatch to The Star
WELLESLEY HILLS, Mass, June
2S.-What Is going to happen to real
estate during the next five or ten
years? The tenant, the home owner,
the builder, and the investor, are all
pondering the question. Developments
In the business field tend to compli-
cate the problem.
The present real estate and building
boom as been going on for almost
ten years. During the war it ran
TO factory sites and industrial build
ing. We increased our productive ca
pacity by about IS per cent and
the building of plants ran 100 per
cent of normal. Industrial property
shot up and the shortage of labor
and materials doubled building costs.
High prices and conservation practi-
cally stopped residential building for
the time being.
Building Peak Reached in March.
In 1919. however, the shortage of
housing facilities forced activity here
in spite of high prices. Home build
ing started with a rush from a low
of s1o,274.612 in November. 1918. to
record figures of s2o6,0 6,0S9.3oo in
March. March. 1924; according to Dodge
ngures. Real estate for residential
purposes has enjoyed a market that
has more than made up for the lean
war years. High rentals have attract
ed much speculative capital. Pub
lic works. suspended during war
times, have been undertaken in record
volume these last three years. high
point of $T9,161, 500 being made in
July, 1922.
At present we find the situation
AS follows: Industrial building is
running at $1s.0o0.0oo per month. as
compared with sS0,52s, 900 in October
1919: residential building shows
s165.375.6o0 for May, 1924. a slight
recession from the high of $206,089,
800 in March, 1924. Public buildings
as compared with a four-year aver
age of two million.
Present Activity Decide edIy Good.
Present activity as a whole Is de-
cldedly good, but here, as elsewhere,
it is a question, not Of where we are.
but which way we are headed that
is important. The tenant is won
dering whether he should buy land
and build now, or wait for lower
selling with the possibility of buy
ing or building later on. The build
er. rushed at present. asks himself
how long it will last and the in
vestor is turning from the industrial
field, where things are quiet tthe
Babson chart shows present activity
at 13 per cent below normaD, to real
estate as an investment
Nor is this uncertainty and ap-
prehension groundless. We have
enough manufacturing capacity to
make almost so per cent more goods
than we consume World markets
today do not offer a very ready out
let for the balance. There will be
no factory building in quantity for
some time to come Office buildings,
likewise, have about caught up with
the demand. The program of econ
omy undertaken by the federal gov
eminent is due to become the style
with state and municipal administra-
tions during the next twelve months
and it is highly probable that the
public building program will return
to somewhere near it's average pro-
portions.
Expects Drop in Rents.
Residences, however. are different,
because there is more than economies
and arithmetic in the matter of build
ing a home. Yet 1t is doubtful that
ANYTHING like the rate of the last two
years can be maintained on higher
priced residences. The speculative
builders who have come into this
field expecting to get from $50 to
500 a month for houses that have
brought $40 to $50 a month under