Masonry Magazine October 1965 Page. 10
HOUSING REPORT
Midwest Activity Gaining Rapidly
Housing activity is gaining more rapidly in the Great Lakes states than anywhere else in the country.
And in most Great Lakes cities, the liveliest sector of the housing market is the existing home market.
People are buying existing homes so heavily because new houses in the low and medium-price brackets are scarce. And the boom is causing property values to firm up though there are few signs of inflation as yet.
These are some of the findings of Advance Mortgage Corporation's current quarterly survey of Midwest Housing Markets.
Housing permits in a six-state Great Lakes region showed a 14% gain over a year ago in the second quarter of 1965 part of this was a rebound from a weather-stricken first quarter. Elsewhere in the country, permits declined 7% in the same period.
Observers in all 10 of the Midwest metropolitan areas which Advance Mortgage surveys reported that the existing home market is now significantly better than for new houses. In Detroit, 73% of the homes listed with multi-listing services were sold in June -an all-time high. Pittsburgh used home sales are the strongest since 1956, Cincinnati's the strongest since 1957-though the Cincinnati market is weak for new homes and apartments.
"Stocks of suitable, available vacant homes appear to be close to the minimum," Advance president Irving Rose observes. Vacancy rates declined more than the national average in most of the markets surveyed by Advance-and the decline appeared to be concentrated in the sales-type units.
In most markets in this region, Rose points out, "New one-family homes in the low-price and middle-price brackets are scarce. (Detroit is the one major exception.) That is one reason for the strength of the existing market.
"Volume builders are concentrating in higher price ranges up to $30,000 in many areas. Moreover, the volume builders' share of the market is declining. Many subdivisions are being developed by groups of custom builders, with models ranging up to $45,000.
"In part, builders are being thrust into these price ranges by rising land and construction costs. This is especially true in Cleveland and Chicago. But even in the smaller markets like Dayton, where the cost rise is not as steep, volume builders are in the $20-$30,000 range 'because that is what the people demand."
"Part of this shift in demand up the price range reflects a shift in the nature of the existing stock. A decade ago, most of the existing stock was pre War, within the city. Today much the stock is post-War, suburban, available in every variety of design. The important innovations in today's home are size and luxury."
Despite the existing house boon Rose adds, "We have few reports to date of any significant inflation in existing property values though this may be anticipated if the boom continues. In Detroit, values in the most desirable suburban locations have appreciated as much as 25% since 1962-yet some scattered lot prices remain low enough to permit extensive building of new homes under $15,000, some under $11,000."
MULTIPLE UNITS: % Share of Market
40 42 34 36 37 41 43 44 49 55
SA
56 65
REGION CINCINNATI DETROIT PITTSBURGHULLE DAYTON CHICAGO COLUMBUS INDPLS CLEVELAND MILWAUKE
APARTMENT COMPLETIONS
PITTSBURGH
LOUNGHILLE
-42
TOTAL UNITS
+236
1+1601
1-54
CINCINNATI 1+26
+12
-2
ONCINNATI
PITTSBURGH
DRITON
CHICAGO
CLEVELAND
ELEVATOR UNITS
019205)
(010144)
0036)
10
APARTMENT UNITS UNDER CONSTRUCTION
1304
ADVANCE MORTGAGE CORPORATION
MIDWEST
Private Housing Permits
% CHANGE
FROM
SECOND OTR, 1964
CLEVELAND
+19
0
-521
WALKUP UNITS
PITTSBURGH
LOUISELLE
DAYTON
152
-125
+32
-10 CHICAGO
-12
CINCINNATI
CUTHILAND
+14
+15
in buildings of five or more units,
exclusive of public housing
ONE-FAMILY
MULTI-FAMILY
TOTAL UNITS
ADVANCE MORTGAGE CORPORATION
MASONRY
October, 19