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The last survey, released on February 6 of this year, covers 318 of the principal cities, and it shows in general that there is in 84 per cent of these cities either a normal supply or an actual shortage of single-family dwellings, 71 per cent showing an equilibrium of supply and demand, 13 per cent an actual present shortage, and 16 per cent an oversupply.
It also shows some very interesting facts concerning the doubling up that has been going on, which is estimated, for instance, in Kansas City, where an actual count was made, at 6.2 per cent of all of the homes that would be normally occupied by one family that are now occupied by two or more.
I would like to submit this for the information of the committee, because it is a fact. It contains a number of tables, which I hope might be printed in the record, because they are small and they do show the concreted information.
Senator Watson. I think they can be printed.
Senator Watson. You give it to us, and if it can be printed it will be printed.
Mr. NELSON. And I will submit with it a copy of the questionnaire.
(The documents referred to, namely, survey findings and questionnaire, are as follows:)
[From National Association of Real Estate Boards, Chicago, Ill. Release February 61 ASSOCIATION MAKES PUBLIC SEMIANNUAL SURVEY OF THE REAL-ESTATE MARKET
GENERAL MONEY SITUATION HAMPERING REAL-ESTATE SALES—84 PER CENT OF CITIES SHOW NORMAL HOUSING SUPPLY OR SHORTAGE
CHICAGO, ILL., February 5.—Effect of present money conditions in hampering real-estate transfers or other transactions involving any new financing is notably reflected in the eighteenth semiannual survey of the real-estate market, made public to-day by the National Association of Real Estate Boards. The findings are based on confidential reports made by member real-estate boards in 318 principal cities.
In measuring the present supply of residential space the survey shows that "doubling” of two or more families in units intended for a single family is practically counterbalancing the effect of the present practical cessation of residential construction. It is thus masking what under other conditions would in many cities be un undersupply of desirable single family dwellings. With this counterbalance, 84 per cent of the cities report the supply normal or short, 71 per cent showing an equilibrium of supply and demand, 13 per cent an actual present shortage, and 16 per cent an oversupply.
In every one of the nine geographical sections of the United States the money supply for real-estate mortgage loans is insufficient for the demand, the survey shows. In 70 per cent of the cities loans are seeking capital; in 22 per cent there is a balanced situation as between supply and demand; in only 8 per cent of the cities is there a condition where capital is seeking investment.
The East North Central and West South Central sections show greatest prevalence of loans seeking capital. Most pronounced shortage of mortgage money is shown in cities of under 200,000 population. Of the smaller cities only 2 per cent show capital seeking loans. But in cities of the largest population group 60 per cent report loans seeking capital, only 20 per cent have capital seeking outlet
Interest rates are rising in 21 per cent of the cities reporting, steady in 75 per cent, falling in only 4 per cent of the cities.
Financing costs as well as money supply show a decided change from conditions of six months ago, when only 53 per cent of the cities reported a dearth of mortgage funds. In the survey of a year ago 40 per cent of the cities stated that loans were seeking capital.
LOAN STRINGENCY TIES UP SALES
Practical effect of general loan stringency on real estate movement is indicated in comments of the reporting real-estate boards.
“Banks not making loans. Local building and loan associations in good shape but loaning only on new building. Makes it hard to transfer real estate where financing is involved, which is nearly always."
"Loaning agencies will loan only when a house is completed and sold.”
“No sales can be made where it is necessary to secure any loan from the banks. This has completely tied up the real estate market.”
“There is a statistical shortage of 5,000 single family homes in this community and an actual market supply that is daily growing inadequate. Builders and architects have several million dollars worth of projects awaiting financing."
Capital is extremely timid on account of the unemployment situation and fear. There are very few loans being made, and it would appear that the lenders of money are waiting to see what effect the new fund proposed by President Hoover will have in stabilizing values.”
“No mortgage money here. Outside money needed. Ample security is offered.”
“There is difficulty in refinancing homes in old districts.”
“ Practically no mortgage money available except special funds at very high rates."
On the other hand other cities say:
“ Banks and building associations are putting the best foot forward, and confidence is being renewed."
“The life insurance companies doing business here have raised their requirements, making it difficult to handle refinancing, but there is some private money available."
“A dividend of 20% by a bank closed a year ago released $400,000, which had a good effect."
“Most mortgagees are refunding old loans for customers who are meeting interest payments."
Shortage of money for conservative first mortgages. Trust some relief from Mr. Hoover's new plan.”
“ Tax relief and a good supply of capital for loans at a reasonable rate would induce considerable building in this section."
Many real estate boards report a general feeling, quite apart from statistical proof, that a turn to a better situation is under way.
SELLING PRICES LOWER--RENTS DECLINE
Selling prices reflect general business abnormality, and are lower than they were a year ago in 85 per cent of the citi reporting. While 31 per cent of the cities report market activity approximately the same as a year ago, 5 per cent report a less active market, 12 per cent a more active situation.
In recording the nation-wide downward movement in rents which has accompanied general cost reductions some reporting cities indicate that the bottom seems to have been reached. Apartment rents, however, are the only group showing any indication toward rising rates. Business property rents show the most pronounced effect of present uncertainties. Office building space is indicated as being in a somewhat more stabilized condition both in regard to rent levels and occupancy than is apartment space. Both show greater present stabilization than does business space.
Central business districts are more generally stable than are outlying subcenters in regard to rents for business space, and to an even greater degree in regard to office rents. The larger cities as a group show this differentiation most strongly.
Cities of under 500,000 population show a much larger degree of stabilization in the matter of rents for structures of every type than do cities above this population line.
EXCESS FAMILIES IN 6.2 PER CENT OF HOMES
Contraction of general business activity is reflected in the fact that despite tle practical cessation of building during the past year 63 per cent of the cities state that they have a normal supply of business property, 36 per cent of them
that they have an oversupply. In apartment structures 64 per cent report a normal supply, 23 per cent an oversupply and 13 per cent an actual shortage. In regard to the present need of residential construction the cities comment as follows:
Many residential units are now housing two or more families, who, when times get better, will unquestionably need accommodations of their own.'
“Families, running into the thousands, have doubled up. Under normal conditions we could just about supply the demand."
“ In this area we would undoubtedly have no vacant home units if it were not necessary for families to double up due to reduced income.”
“ If our steel plants should begin operations at a normal or near normal stage there would probably be a shortage of single-family homes here."
A count by the Kansas City post office through its carriers, made as of January 1 of the present year, found in that city 5,059 such excess families. It discovered that all occupied single-family homes in the city, 6.2 per cent are now housing one or more excess families. If all these were to move at the same time into individual quarters, the percentage of vacancy would be decidedly below normal.
Details of the survey findings are given in the following tables :
TABLE I.—Percentage of cities reporting more, the same, or less activity in the
real-estate market, classified by section and size of cities, compared with November, 1930
TABLE II.—Percentage of cities reporting higher, same, or lower selling prices
classified by section and size of cities, compared with November, 1930
85 79 92 91
81 87 100
TABLE III.—Percentage of cities reporting overbuilding, normal supply or
shortage in single-family dwellings, apartments, and business property
TABLE IV.—Percentage of cities reporting upward, stationary, or downward movements of residential rents as compared with November, 1930
2-family dwellings Apartments
Down- Up- Down-
3 34 63 17 2855 130 70
52 15 54
17 83 5 48
47 2 3761
100 29 71 321
32 65 4 4254 4 46 50
TABLE V.-Percentage of cities reporting higher, same, or lower rentals of
central and outlying business property as compared with November, 1930
78 1585 22
78 on 24
991 15 85 1585 2375 33
100 2771 27
i Less than 1 per cent.
TABLE VI.-—Percentage of cities reporting higher, same, or lower rents in central
and outlying office buildings as compared with November, 1930
TABLE VII.—Percentage of cities reporting more activity, the same, or less
aotivity in the subdivision market as compared with November, 1930
TABLE VIII.-Percentage of cities reporting an excess, equilibrium, or shortage
of money for real-estate mortgage loans