from a 1922 Sear Roebuck house kit advertisment.
Larchmonter Times, December 11, 1922
ROGER W. BABSON PREDICTS GREATEST REAL ESTATE BOOM
Automobile has solved suburban residential development and next four or five years will witness greatest activity.
Roger W. Babson, the imminent business analyst, in a recent address before the business men and financiers of New York, stressed the fact that the next four or five years are certain to show the greatest activity in the development of suburban residential districts ever known in the United States. He stated that the automobile had sloved the last problem of suburban development, and that without question suburban development during the next few years would be one of the great basic movements in this country. In commenting recently on the situation in Westchester County, as he sees it, Alton W. Wells, president of the Empire Homebuilding Association said:
An economic situation which is developing rapidly throughout the country offers an amazing opportunity for business men and property owners in well located suburban districts within the metropolitan area of our larger cities.
While it is the consensus that general business will be good during the next few years, it is obvious that the communities and business organizations which will prosper the most will be those which induce prosperity by active preparatory methods and by the establishment of proper local conditions tending to encourage community growth with its resultant quickening of all local business activity.
Westchester's greatest opportunity
Westchester County in the last decade or so has been preparing for just such an era of prosperity and home-building.
It is evident, therefore, that Westchester faces a most unusual opportunity, the very opportunity, in fact, the businessman and residents of the community have been anticipating and awaiting for years. This opportunity is knocking at the door as we stand at the threshold of the year 1923.
We have three known factors and one important deduction on which to base this argument: first, an approaching period of general prosperity; second, the sound anticipation of an unequaled movement in good residential areas near large cities; third, the fact that nowhere in the United States is there a district so well favored, so ripe for this opportunity, as Westchester County. With its splendid natural advantages, its good roads, its excellent commuting facilities, Westchester represents the natural territory for the outflow of the better-class residential expansion of the greatest city in the world, New York!
The natural deduction is that a greater share of this approaching prosperity will come to the business men and citizens of suburban districts where no effort is spared to encourage residential development and in the immediate building of homes. Westchester has started well in 1922, and if 1923 can be made the greatest home-building year ever known in this County, it is certain that a great degree of prosperity, unequaled in the past, will be the direct result.
Economic Interpretation of a Home Building Movement
The development of an unusually active home building movement in Westchester County has a business meaning, translatable into dollars and cents, for every business man and every property owner or investor in this County. Ten thousand new homes in Westchester will mean a great increment and stabilization of land values. It will provide a local expenditure or $150,000,000 in the purchase of land, building materials and labor. It will increase banking activity by double this amount. It will call for increased community facilities and public utilities. It will bring into Westchester County 10,000 home-owning families of the better class, representing an increased annual local expenditure of over $20,000,000 per annum for the benefit of the business men of Westchester!
There are thousands of home sites available now in well-developed subdivision properties in Westchester. There are hundreds of acres of well located land ready for residential development in proportion to the demand which may come in future years. The building of homes has now become a dominating factor in the success of any land development in a suburban community. In Westchester County the time is past when lots can be sold purely on a speculative basis. The average lot buyer today is a prospective home builder!
Thousands of persons have already purchased home sites in Westchester, thousands more will buy when conditions are right. But, will they build in 1923?
Financing new homes in Westchester
There exists today a definite lack of money available for the financing of new dwelling construction in Westchester County. The ordinary channels of building and permanent mortgage money - banks, building and loan associations and private loan sources, are flooded with loan applications which they cannot grant because their funds are employed. The total mortgage loan resources are taxed beyond possibility and, in total amount equal one-fifth of the demand which will come next year.
In addition to this fact we must consider that many prospective home builders have not sufficient cash for immediate investment as required above the ordinary 60 percent mortgage loan. Many have 20 percent to 30 percent and would build immediately if more liberal assistance in the form of amortization mortgage money was available. What is needed is more mortgage money that may be loaned on liberal terms. Ninety percent of the prospective home builders awaiting not for reduced building costs, but for financial aid.
Westchester Homes as Sound Mortgage Collateral
The homes of Westchester, particularly the moderate cost homes of good communities, offer the best possible security for mortgage investments. No other class of improved real estate offers better security. In periods of depression, when office buildings, hotels, factories and warehouses go under the auctioneer's hammer in mortgage foreclosure proceedings, the average man's home weathers the storm and rarely undergoes forced sale. The building and loan associations, sometimes loaning as high as 50 percent of the land and building value of the residential property, rarely if ever record a foreclosure.
In other fields, not so sound as that of home-building, we find well-developed financial methods. Automobiles, furniture, pianos in many other articles of luxury or necessity may be purchased with a first payment of 20 percent, or less, in cash and the balance in the form of an amortization (installment) mortgage.
Why not a more scientific development to the home financing field? Why not bring closer cooperation between investors and home builders to their mutual benefit?
The Problem of Westchester's Business Men
We have indicated in a brief manner the problem which faces the bankers, realtors, merchants and citizens of Westchester. We have indicated the rewards which must follow the solution!
Every progressive business man of Westchester should contribute his share in the effort to ensure a sound and substantial home-building movement. A greater proportion of banking business investment should this time be directed into financing this program. Mortgages on moderate cost homes should be encouraged as a favored class of investment for the a small investor. The valuable contribution of building and loan associations, sound home mortgage bond securities, and other forms of providing financing for home-building should be recognized and encouraged.
If the business men and property owners of Westchester believe in the future of their County, if they recognize the soundness of home-building investment in their own communities, if they wish to grasp of this unequaled opportunity of inducing sound prosperity, they must support the 1923 homebuilding program.
"Invest in Westchester Homes!" should become the business man's slogan of 1923. The home builder will do the rest.
Ten thousand new homes will lower the tax rates, increase the payrolls, stabilize the land values, increase bank deposits and add substantially to all merchandising turnover. This is Westchester's greatest opportunity. Westchester's future and Westchester's greatest asset lies in the field of home building and home owning!
Do you have material or suggestions
for the 1922 Year in Review? Let us know, at firstname.lastname@example.org.