Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-07
PREDICTS ACTIVITY
IN REAL ESTATE
Editor Cites Federal Reserve
Policy as Stimulating to
Business.

Declaring that a man buys hom'
not when it is cheap. but when he car
afford it, Marc A. Rose says there art
indications that the tide of business
generally is beginning to rise, and be-
yond this there are fundamental fac
tors now at work that will bring new
activity to the real estate market.
Mr.. Rose, who is an editor OF Bust
ness Week, spoke recently at the Mid
winter meeting of the National Assocla-
ton of Real Estate Boards. Be based his
Improvement predictions on observations
and bales of statistics" gathered by his
and 10 other business publications COW
ering finance, banking, construction, the
power and light industry and otner eco
nomic fields.
Speaking on the economic factors IA
vorable to real estate at present, he gave
his audience an imposing list. Chief
among the factors emphasized was "evl-
dence" that the Federal Reserve Board
intends to liberalize its policy" and
signs that in an indirect way the sys-
TEN may be sending a flow of money
into banks, thus vigorously stimulating
business.
DeplOres Cheap Money Talk.
He deplored the constant "prattle'
about cheap and abundant money
talked of during the past year and said
that the long-term funds required for
realty development had been neither
cheap nor abundant, but that they are
getting so now.
Scoring talk of overproduction as a
lazy lodging of the issue, Mr.. Rose as
serted that there can be no overproduc-
ton when thousands of people in this
country are without homes, when sew
eral million homes have no bathrooms,
and when one million homes within
reach of power stations, are without
electricity.
Here he listed the provision of home
financing plans for $2,000-income fami-
lies a major potential source of new
business for real estate, pointing out
that 40 per cent of the American peo-
pie have incomes of this amount or
less, and yet have the desire for home
ownership.
THE country needs Ford volume in
decent housing at a price the average
man can afford" said Mr.. Rose.
"A certain amount of activity must
60 on. We must eat, we must be
warmed. we must be housed somehow,
we must be clothed. Business doubles
about every 20 years. Interruptions are
only interruptions"
Five Factors to Improvement.
"There are five factors that point to
general business improvement, and as
real estate is so closely yoked to busl-
ness, these should please the real estate
man:
Sentiment is better. This is most
important of all.
There is plenty of money. 1t is idle;
it hates to be unemployed. With long
term borrowing expensive, there can be
no revival of business. Long-term
money is getting cheaper
Retail stocks are exhausted Things
are wearing out. Replacement buying
is beginning.
Consumer purchasing power will be
better. The dollar buys more today.
Highly important is the attitude of
the Federal reserve banks. There is
evidence that the board intends to
liberalize its policy. If the system
pumped money into the other banks its
pressure would improve the bond mar
ket and vigorously stimulate business
There are signs that this NAV
be taking place.
Cost of building is lower" said Mr..
Rose. This is more important to those
who handle commercial property than
to those who handle residential. 1t
would be well to build now for COM
mercial firms that will be in business
for some time. A man buys a home
usually not when it is cheap, but when
he can afford to buy one; demand is
accommodating in this field; many fami-
lies are impatiently waiting but they
must be sure of their jobs, must ac-
cumulate savings before they will buy.
That time I firmly believe is near"