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Show SMALL HOUSES NEXT SAYS BABSON Statistician points to new opportunity op-portunity for building industry. in-dustry. "Wellosloy Hills, Muss. Nov. 23,1923. The day of the small house is dawning according to! Eoger W. Babson who today issued a statement on the trend of the building industry. "There is no question that some day the cost of building will be much less than it is now the same as it is now about lo-20 percent less than it was in 1920," says the statistician. "The time will come when instead in-stead of talking about the poor tenant, our sympathies will bo enlisted in the cause of th-j landlord. Every student of fundamental business statistics recognizes this situation. The point, however, which is important impor-tant is whether or not this movement will come about suddenly sud-denly or whether it will be spread out over a period of years. My own studies strong-lv strong-lv suggest the longer and more gradual movement. There arc two principal reasons :- "The first is that with al! the new dwellings built during the past four years the greater part have been priced far out of reach of the great majority of people. In fact some figures wojked out by my organization organiza-tion show that less than 10 pe: cent of the people can afford to buy the so-called 'moderate priced' dwelling built today. Some, to be sure, have tried to and may get along all right un til they strike reverses. Th. average family, however, cannot can-not afford to give more than one week's pay out of every month for rent. Less than b"1 percent of the heads of families in the United States mak r more than ."( a week. Check up the cost of the houses built lately in your community and see how many of them can be rented profitably for less than $50 a month. Hence, when one talks about the saturation point in dwelling houses lr; must take into account the price zones considered. The saturation at present .rices apparently is ray. idly being ap proached, but as soon as mi other 1.') percent or 20 percent cut in building costs is put into effect an entirely new group of prospective home-owners is reached. The next point is that build 'nig costs can be reduced when the necessity arises. The only reason prices of building materials ma-terials and building labor did not decline as much as the average av-erage of other things was be e'Mi-e the demand was sufficient suffici-ent without it. That is mere v the natural working of econ oinic law. No one should be blamed for not charging less than the market price. On tie other hand, as necessity arises, the cost of building can and will l.e cut. If prices today were at an irreducible minimum mini-mum and demand wen; falling oil', there would be more for building industry to worry about! "Tlie chance of a sudden either in building . :.t,. values, therefore, y, mall. The moveuienr, ei (.()t,ary, will - fr more j;..y to carry out. the appenr-.,,.,. appenr-.,,.,. ,,f ..eric of steps. We I ..in. big ".tep down in 1 , fu'e,-.... d by " partial advance. J'a l'oie long another step pro bably will be in order. General Gene-ral business as reflected in the Bahsonchart is running at lu percent below normal. The idea, however, that building values are suddenly going to drop to pre-war levels seems as improbable as the view that they will always continue a, present high prices. "It is highly important, however, that those who are interested in-terested in new building recog- jnize the trend and work w ith it. The greatest opportunities during dur-ing the coming year will be in; building lower priced houses, not high priced ones. 'What is most needed today is a house within reach of the great 9H percent of prospects. Necessity Necess-ity is the mother of invention. Some day we shall probably look back on the high cost ot building of today as th source of tremendous benefit becaus. of the economies and improvements improve-ments in construction method-; it will have caused. If j. resent indications are reliable the next few years will bring forth some remarkable changes in Hie customs and methods of building houses. If a buildet is to keep ;i cintinuons flow of ,new business, he must lead in this procession with the elliel aim of producing homes for the :reat majority. Kvery 10 percent per-cent that the cost of attractive homes can be reduced will in crease the field of possible prospects pro-spects by 500,000 to 1,0(10,000 people. "During the past few months no less than a dozen leading architects have brought to my at tent ion plan t which they are developing whereby conil'i.rtablet livable homes can be built for much less than the usual cost. Soiti" of these methods probably will prove impractical, but some "I t hem are going to help in pro lacing houses which the average aver-age man can afford to live in. They vary widely in method but all aim at the same purpose. pur-pose. Most of them involve a -aving of labor. This, by tie-way, tie-way, is exactly what has hap eiied in every other industry when labor costs have become exorbitantly high. "Some architects have found that certain of the fea lures in the usual house which dd to the ex peuse call be sue -s-I'n I ly eliminated. Others lave attached the problem on the principal of .pianlity pi'" diietion. Much has been done ' n I lie way of more economical planning so that delays and nldiips in the work are almost entirely eliminated. "The idea that people nr.' ,!wa'i giiing to y. rain the las', notch in order to get together the lent each month is nbso lut.-ly fallaciniis. When a. numbered' people greatly need a certain thing someone always finds a way to get it for them. Moreover, such service usually carries with it the greatest reward. re-ward. This present need for lower priced dwellings and lower rents represents such an opportunity. "From the investor's point of view the . resent situation in the building industry suggests three things. "Karnings of the industrial concern supplying the building industry will- depend during the next few vcars upon i whether or not, the builders grasp their present opportuni-1 ties. The situation should be watched carefully by those in teleste. in the securities of this uronp of building supply concerns. con-cerns. "The investment builder faces the opportunity directly. Tin-re is little (piestioll but lie will profit both by turning bis attention to developments ' idoug the line of groups of less expensive houses than by con-j tinning his act ivi l ies in the line of groups in t he higher price, fields. I "Finally, the average inves-..r inves-..r has an opportunity in well; located Mil. urban land. Thous an. Is upon thousands of modes!. ; ; I on. is will be built during the. j next few years. The automobile automo-bile has broken the transit1 limitation w hich has heretofore hereto-fore bound our cities. The j trend will be in favor of suburbs sub-urbs and the investor who puts a part of his funds in well i selected suburban property a! a fair price, judged on presen' levels, should profit during the next few years. " j |