Evening star., 1936-03-28
SPECULATION RISE
IN BUILDING SEEN
Activities Broaden Since
End of 1884, Statistician
Reports.

The operations of speculative home
builders and development companies
have broadened considerably since the
end of 1884 That this is no mere
flash appears certain from the sta
tistical picture for this class Of res
idential building activity.
Writing in the April issue of the
Architectural Record, L. Seth Schnit-
man. chief statistician of the F. w.
Dodge Corp, states:
"There are a number of reasons
why this improvement in development
company operations has occurred. OF
these none perhaps is SO impelling as
the recognition by speculative and
operative builders that genuine de-
mand exists for an inexpensive, we'll
built house which embodies many OF
the features previously available only
In the more expensive home, such
as brass piping. copper guttering.
mechanical refrigeration, oil burner,
air conditioning, insulation and the
like.
''Liberalized financing, too, is play
ing its part. Directly and indirectly
the Federal Housing Administration
plan of insured mortgages has
afforded considerable stimulus to
speculative building undertakings in
the small-house field.
Junior Financing Out
"The availability of first mortgage
money for small houses on the basis
Of an 80 per cent ratio to the ap-
praisal value, amortizing over period
of 20 years, has eliminated the need
for Junior financing. To be sure, not
all small homes now being erected
are financed under the F. H. A. in
sured mortgage plan. This program,
none the less. has impelled savings
banks and state-chartered building
and loan associations who are not
operating on the insured plan to ex-
tend their terms to cover a 20-year
amortization period on interest rates
at least as attractive as those offered
by institutions subscribing to tho
r. H. A. plan.
Each month Of 1885. for the 81
States east of the Rocky Mountains
showed a larger number of new single
family houses erected by development
builders than in the corresponding
months of 1884. For 1885 as a whole,
on the average, 1900 new homes each
month were undertaken by develop
IN, tot uyito
an average monthly total valuation of
about $685., 900 exclusive of the value
Of land.
Big Increase Seen.
During 1884 such operations aver
aged only about 900 new dwellings
PEI month with an aggregate monthly
average valuation of only about ST.
245 900. From these comparisons 1t is
seen that in units the 1885 operations
of development builders were about
at per cent of the 1884 results and,
that on a valuation basis. 1885 was
a6o per cent of the 1884 volume.
THE average value per single-family
dwelling erected by developers in 1885
was $4,000. In 1884 the average value
per unit was only s3,7s2 The increase
in average cost per house between the
two years was as much a matter Of
improved quality and broader activity
in the East and North as reflection
Of rising unit building costs.
THE outlook for development build
ing operations of the type here
described is decidedly encouraging. It
is not that We are soon to witness
boom proportions, but rather that the
improvement that started in 1884
seems destined to continue through
1886. The direction is upward and a
gain for the current years contrasted
with 1885 of substantial proportions
may be confidently expected"