News
... Is the VA market for World War 2 vets near exhaustion? Korea vets buy a cheaper house
continued from p. 55
In Philadelphia, Korean vet buyers increased from 515 in January to 589 in May while World War 2 buyers dropped from 1,950 to 1,344. In Chicago, the Korean vet total went from 215 in January to 699 in May while World War 2 buyers increased from 718 to 1,855. In Milwaukee, the Korean veteran figures went from 172 to 246 while the total of World War 2 buyers dropped from 670 to 629.
Korean veterans buy a less expensive home, obviously because they have less cash on hand and smaller incomes.
Average prices of VA homes bought in Milwaukee are: $10,331 for the Korean vet and $11,468 for the World War 2 man; in Cleveland, $12,875 for the Korean veteran and $13,755 for the World War 2 veteran.
Though the VA market is undergoing a substantial shift, builders are quite concerned over the World War 2 GI housing program, due to expire July 25, 1957, unless extended by Congress. Many builders said they would like to see the program die in favor of a liberalized FHA program proposed in a bill by Rep. Olin Teague (D, Tex.) chairman of the House veterans affairs committee. It is supported in principle by NAHB. (Little hope is held for its passage this session, however.) Across the nation, as many builders prefer a one to three year extension. Representative comment:
•Ί Maurice Fishman of Precision Housing Corp., Cleveland: "I've given orders to my salesmen that no GI orders are to be sold. The VA is impossible. You can't get deals closed. Every day there's a new regulation. The red tape kills you. The death of VA would be the best thing that could happen."
•Ί Joseph Meyerson, vice president of Grandview Building Co., Los Angeles: "We would prefer extension of the present program for at least two years until we had an opportunity to examine all phases of a new FHA program."
•Ί Carl Metz, big Philadelphia builder: "They (VA and FHA) have overlapping functions. If it's possible they should be brought together."
•Ί E. J. Pollack of Blue Ribbon Construction Co., Miami, complained that he hasn't "made a dime in three year- due to low valuations, but added: "If they stop VA, they stop 98% of my business."
One common note in builders' comments was this: no one is very concerned about the veteran they are just worried about the effect on the home building business.
This has prompted Rep. Olin Teague (D, Tex.), chairman of the House veterans' affairs committee, to come out flatfooted against any extension of the GI program. He may yet have his way.
The Senate has passed a housing bill which provides for one-year extension of the program but there is a possibility that the House will pass no housing bill at all not even its own. Several extension bills have been introduced in the House but Teague has blocked all but one. It merely gives builders a year to complete deals made before the cutoff date. The Senate has not acted on this bill.
MARKET BRIEFS
Boom in used homes
The used house market looks hotter than the new house market.
A new survey by NAREB says "more and more home buyers are finding the existing house the best buy" because of rising prices on new homes, result of higher building and land costs.
NAREB said that realtors queried in the survey reported current sales volume equal to or higher than last year.
The survey, covering 220 market areas, shows that increased interest in existing homes built since 1940 has kept prices the same or
higher in a preponderance of areas, especially in the $12,000 to $20,000 bracket. NAREB figures on the percentage of reporting areas with post-1940 houses selling at level or higher prices:
$20,000-up . . . 58%. Under $12,000 . . . 65%.
$12,000 to $20,000 . . . 70%.
(A statistical report from the Boston 5β * Savings Bank shows prices on existing homes sold in the Boston area have risen from 4 to 5% in a year, but unit volume has declined.)
Prices of older homes, built in 1940 or before, have dropped in most areas, indicating a demand for modern if not necessarily new housing.
Are autos the big enemy?
Be fair to your family . .. buy your
HOME FIRST.
Buy the house, then the car
(because of credit policies)
Slogans like these are beginning to crop up in home building merchandising. They mark the start of a bare-knuckles attack on what many builders regard as their chief competitors: autos and other hard goods sold on "easy term- that load many customers with such heavy installment payments they cannot pass credit standards to buy a house.
The first slogan was the theme of Wichita's Home & Garden Spectacular last month. Wichita builders hammered on this point: "In seven out of ten cases when a family obligates themselves for $1,000 or more, we lose a potential customer for 36 months."
The second slogan will be the theme for Houston home builders' promotion of Natl. Home Week (Sept. 15-23). "We hope the automen will rise to the bait and give us some argument," says Conrad "Pat" Harness, executive vice president of the Houston HBA. The former NAHB public relations chief figures the more discussion, the more builders will drive their point home to the public: if you buy the car first, you probably will disqualify yourself to buy a house. The campaign will be plugged in all media newspapers, TV, radio, billboard-even on bumper placards for autos.
Swing to two-stories?
Look for a gradual swing back to more traditional two-story houses. With land as expensive as it is, and with buyers pressing for more and more space, builders will have to return to two-story construction to meet demand without pricing themselves out of the market.
More and more evidence piles up that the public wants bigger houses. Items:
•Ί When the Associated Press sends out a small house plan (900 to 1,000 sq. ft.) through its floor plan service, which is widely printed in newspaper realty pages, response is relatively light, according to AP Real Estate Editor Dave Bareuther. When AP syndicates plans for a larger house (1,500 or 1,600 sq. ft.) consumer response is far greater.
•Ί Last year's birth rate, estimated at an all-time high of 4,100,000, made 1955 the fifth record-breaking year in a row. In 1950, the average size of the American family was 3.35 persons. By the end of 1954 it was up to 3.59 persons and still climbing.
$40 billion in sewage building
It will require $40 billion in new sewage disposal systems to serve residential areas in 13 eastern states where new state legislation makes such systems mandatory, the New York State Health Dept, estimates.
NEWS continued on p. 63