Evening star., 1936-05-30

Building material prices 86.l o5.O
New home building 81
This organization notes the gain
for rentals in relation to building
costs and suggests that we are ap-
preaching a point where new con-
struction may be expected In volume.
Reports from various parts OF the
country likewise indicate a definite
upturn in real estate income. Tnls
Improvement is due both to increased
occupancy and to slightly higher rent
ais. New York, Boston, Detroit, Cnl-
cazo. st. Louis, Minneapolis and the
Rocky Mountain district report an
Improvement in occupancy and rents.
The Improvement in Spokane and
MANY other Pacific Northwest cities,
however, appears to be due not so
much to normal causes as to the ac-
tivities of the various governmental
agencies and to stimulation by the
Grand Coulee and Bonneville Dam
projects. Real estate income In Cali
fornia has shown a definite improve
ment due to higher occupancy and
moderately higher rentals.
Securities Show Gain.
"Reflecting the improved real estate
situation, prices of real estate Secur-
tiles have registered substantial gains
from the low levels reached during the
depression. According to an index OF
200 Eastern issues the average price,
which was at s218 per $1,000 bond at
the end of 1888, reached $4o8 In
March, 1886. New York issues ad-
vanced to 1898, Philadelphia issues to
1916, Boston to $572 and Pittsburgh
to S287. Theater issues were the
price leaders of this Eastern index,
rising to S619; Office buildings at Sass
were next; housekeeping apartments
were next at 1865. An index Of AZ
Chicago real estate bonds picked at
random from selected issues rose from
a low of sl94 in February. 1888, to
1898 in March, 1936-an increase OF
los per cent. On the Pacific Coast,
and particularly in California. the
advance in the market price of real
estate securities has also been very
encouraging An index of so Pacific
Coast real estate issues advanced 81
per cent during the two months of
January and February and on March
the average price for this group was
$538 as compared with price of 1857
as of December 81, 1884.
Generally speaking. there have
been no important real estate offer
ings in the country during the past
year, activity being largely confined
to securities that are emerging from
reorganization At least two locali-
ties. Detroit and Chicago, report that
1t would be extremely difficult to sell
new real estate issues in these areas
or to refund issues at lower interest
rates. In California. within the last
few months, one small real estate is
sue was refunded as first mortgage
4s due 1851. The issue had q fair
sinking fund and call price and the
100000 bonds were secured by land
and building appraised at s2,32l. 900.
Earnings were about six times re-
uuirements, after taxes and deprecia-
ton. Many large institutions such as
insurance companies sare reported
seeking such loans on q per cent
basis, largely due to the extreme din
Guilty of profitably investing funds on
hand.
On the whole, Government aid ex-
tended to real estate owners has been
decidedly helpful. The r. r G. loans
to banks. insurance companies and
mortgage institutions eased the strain
and made 1t possible for those insti-
tutions to show greater leniency to-
ward mortgagors in default.