Evening star., 1939-01-07
Loan Board Member
Sees '39 as Good
Really Year
Large Turnover Rather
Than Price Rise Urged
By Dr.. Husband

BY Dr.. Husband
Increasing prosperity in the rea
estate business in 1889, based on 8
large turnover Of properties rather
than rising prices, was foreseen to-
day by DR.. William H. Husband
member of the Federal Home Loar
Bank Board. in an address before
the Kansas City (Mo) Real Estate
Board.
Declaring that for the first time ir
history the United States has be-
come definitely housing conscious,
DR.. Husband based his prediction OF
q stimulated real estate market or
four factors:
l. Increasing recognition of the
need for more and better housing
facilities.
2 The favorable record of the past
year.
3. The existence of improved
home financing facilities.
4, The better outlook for business
generally.
Figures Are Cited.
DR.. Husband cited figures show
Ing that an increase in real estate
activity already is actual rather
than theoretical. Data compiled by
the F. w. Dodge Corp, he said,
shows that from July to November
1888, total construction contracts
were worth $1,513,217,000, as COM
pared with $1,2l0,374,OO0 for the
same period in 1887 For residential
building alone, the comparative fig
ures for the two periods were $495,-
283 900 and $345 ,5O7 900, respectively.
More important than the statis-
tics" DR.. Husband said, 'is the ex-
istence of a tone of confidence which
should augur we'll for real estate
operations over the course of the
next few years.
1T is we'll known that building as
we'll as most forms of economic &C
tivity, Is but the elimination of
plans which take root in broad, pub
lie confidence Leaders in the field
of real estate must nurse with tender
care this new twig of confidence
until it develops the status of
full-groWn tree"
Warns Against Rise.
The speaker warned against too
rapid rise in the trend of building
costs, pointing out that "if their
advance is too rapid, effective de-
mand may easily be stif1ed."
Better terms of financing, DR..
Husband explained, are stimulating
home buying and building. He men
toned, for instance, the trend to-
ward longer-term loans, pointing
out that monthly payments on a
lO-year, S per cent loan for $4,000
would be $3l.82, whereas the same
loan for 20 years could be financed
by installments of only $3.50
monthly.
1T may be argued" he said. that
this penalties the borrower in the
form of an increase in the total in
terest cost. However, from the point
Of view of the home owner, this Is OF
secondary importance. His basis OF
comparison should not necessarily
be a 10-year as against a 20-year
plan. but as between purchase and
rental.
Bolsters Argument.
Assuming sound construction,
ADEQUATE design and good location.
the extension of the period OF
financing serves materially to bolster
the argument in favor of ownership.
Since rent is charge for an un-
limited period. it constitutes an
alternative cost which would apply
Indefinitely"
Funds for building. DR.. Husband
said. are ample in every part OF the
country. Also there is a great need
Of housing. The problem is to "set
both forces into effective market
activity"
Finally, DR.. Husband pointed to
widespread. general business pros
perity" as perhaps the most impor-
tant factor working for a revived
real estate market.
There is only one sustaining
source of purchasing power for the
great mass OF our people" he SAID.
This consists of widespread, gen.
eral business prosperity. Various
forms of Government relief and as
sistance can bolster such nurchas-
ing power temporarilv. but thev are
essentially a form of expediency.
The resurgence OF business in recent
months should, Therefore. lend up
lifting influence to all other
branches Of economic activity"
Larger Turnover.
DR.. Husband suggested to real es-
tate men that they seek proflts
through large turnover in busi-
ness rather than greater gains on
unit transactions. He doubted that
the next wear would see any sub
stantial rise in rents because OF the
large "overhang" of properties, the
presence Of cheap money and also
because OF keen public sentiment
against higher rents.
With regard to the local situa-
hon in Kansas City. DR.. Husband
pointed out that there Is a large
real estate "overhang" as we'll as a
high rate of vacancy. But despite
these factors. he felt that there
is reason for long term optimism AS
to real estate recovery here. He
noted that Kansas City is lone of
the key. gateway cities to the great
West and that your basic line
should be upward"
"In light Of this summary picture
of Kansas City," he said, "a reason
able policy would appear to be one
which related the comparatively
short-term conditions to honestly
expected long-term developments.
The essence of such policy would
be mixture of courage and good
business sense"