The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1937-07-15

IlC Ill u u L
ately optimistic survey recently
released by the National Associa-
ton of Real Estate Boards is there
fore of unusual interest. Its main
findings are as follows:
There is an under-supply of sin
gle family residences in large ma
jority of towns and cities, some
shortage appearing in 70 per cent
of reports.
The board states that there IS a
growing scarcity of detached
houses for rent, which is causing
an advance in purchases of used
homes, and new buildings. This
doubtless accounts for the finding
that the real estate market has be-
come more active in the last few
months in 81 per cent Of report
ing cities. Also some current gain
in new home construction, is re-
ported.
That this view of residential
shortage may be correct, is indi-
Gated by the boards finding that
rents have been rising for single
family houses in 80 per cent of the
reporting areas, and that this Is
true of 100 per cent of cities hav-
ing a population of over 100000.
National Industrial Conference
Board statistics show residential
rents in June to have been 116
per cent higher than a year ago.
38 per cent above the lowest
point of the depression, and only
So per cent under the 1929
figure.
Before analyzing this part of
the building situation further,
let us see what the real estate
board has to say of other aspects.
1t finds little shortage of
ornaments.
1t finds little shortage of bust
ness space. In fact, 80 per cent
of the cities of over 100000 re-
port an over supply of such
space. While rents for centrally
located business space are mostly
higher than a year ago, there
is not much change in outlying
space.
Office space rentals are dis
tinctly SLOW" but have recently
begun to pick up in the larger
cities.
These facts fit in we'll enough
with the F. w. Dodge figures
which show that while residential
building has gained rather de-
cidedly, factory and commercial
building are little changed from
the general level of the past IL
months. Public works are lower.
The real estate board finds
that money is seeking mortgage
loans in 70 per cent of reporting
cities, most notably in the larger
ones. But, while this undoubtedly
shows improvement, it should be
noted that the prevailing rate of
interest in such seeking" is 6
per cent, with per cent next
most common. (ThiS applies to
first mortgages on new smile
family houSes.) There is some
Az per cent money. but in only
2 per cent of the cities.
Furthermore mortgage money
rates do not seem to be changing
much. And I may add that my
information is that lenders re-
quire a larger margin of security
than formerly.
Undoubtedly, therefore, uncer-
tainty as to the purchasing power
of money and the possible inter
ference of Government through
taxes and public operations in the
building field, are restricting the
flow of private capital.
The board refers to reports of
rising building costs as a deter
rent. I find one index of con-
Struction cost at 1872 in May, up
from ITS in March, and 100 in
1918. Skilled building labor has
for some time been scarce and
high priced. Except for hides
and leather the building material
group of commodity prices is the
nearest to the 1926 level among
all groups compiled by the Bureau
of Labor Statistics.
All of which seems to suggest
that aside from single family
houses, building gains will be
small until Cd private investment
and lending are made safe, and
CD better profit opportunities
bring larger demands for business
and office space. But rising rents
indicate further good gains in resi-
Dental building.
Chicaoo ProdIIca