Columbia University Libraries Digital Collections: The Real Estate Record

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December 25, 1920 RECORD AND GUIDE 861 New Conditions Which Favor Building Prospective builders, who have structural projects in mind but who have held them in abeyance because times have not been propitious for building, would do well to carefully analyze the new conditions existing today. In many instances the result would be an immediate start on these long-delayed operations. Numerous reasons obtain why prospective builders should plan an early start on delayed construction. Pros¬ pects of an open winter, with more actual working days than have been known for the past few years, are excel¬ lent. Building material markets are now in a better posi¬ tion to supply required structural commodities than they have been for many months. Real price concessions are to be had in order to stimulate buying activity and, as stocks on hand are generally plentiful, immediate deliveries are to be had. If all projected construction should wait for a concerted start there would be the same congestion of orders and long waits for materials that marked the early part of 1920. Material markets are more fully stabilized as to prices and assurance of deliveries than they have been tor many months. It is believed throughout the industry that the recession of material prices probably is ended. Manufac¬ turers have cut both production costs and profit margins to the limit in the hope of influencing purchasers to come into tlie market, but just as soon as the demand increases to any great extent building material prices are bound to advance above the levels that now maintain. Labor for construction is plentiful and, what is more important, is willing to give better value in the form of work accom¬ plished than has been knowns during the years since the start of the war. This factor in itself makes possible a considerable saving over former building costs. During the past two weeks have come announcements of substantial reductions in important building commodity lines. Makers of cast iron pipe are ofifering their product at a recession of about $14 a ton in order to influence prospective purchasers to place orders. Hollow tile manu¬ facturers offer significant concessions on definite orders. The railroads, by removing their charges for harbor lighterage, have been responsible for reductions in hydrated lime, plaster boards, plaster and other essential building materials, which, while in themselves not important, do affect the completed cost of a structure. Reduced fuel costs and a better supply of coal to manufacturers have brought down the price of Portland cement, and other lines will be similarly affected. The prospective builder who takes early advantage of this combination of favorable factors will obtain a finished structure at a cost considerably lower than that possible only a relatively short time since. There is no great hope for a further lowering of building commodity prices to any extent, although .some slight reductions may be an¬ nounced, but, on the other hand, with the concerted rush for building materials and supplies that is sure to come with any revival of structural activity, the markets will be offered more business than they can absorb and prices will stiffen perceptibly. There may then be the same scramble for preference in deliveries, the same delays, and the consequent advance in prices that have been experienced ill the past. Restoring Open Competition The authority of the Lockwood Investigating Com¬ mitte, as delegated by the Legislature of 1920, will expire in a few days. It is taken for granted, however, that upon the organization of the Legislature of 1921 Senator Lock- wood and his associates will be authorized to continue their work where it is left oft' at the expiration of the closing year. In one respect, developments of the last few days in¬ dicate, the committee practically has completed the most vital phase of its work. Due to the persistent and deter¬ mined efforts of its chief counsel, Mr. Untermyer, the com¬ mittee already has broken up the practice of combinations among the different factors in the building industry. The Association of Cut Stone Dealers is as good as ended, the Stone Mason Contractors' Association has abandoned its organization, the Composition Roo/ers' and Water Proofers' Association is taking steps to comply with the new order of things, and the indications are that numerous other associations of similar character will follow suit. Thus, no matter how the courts may deal with the various individuals who have been indicted as a result of the investigation, definite benefits of far-reaching conse¬ quence in the building industr>- in the metropolis already have been obtained. This is reflected in the prices at which contracts for new construction and for rebuilding are being let. It is beyond question that the excessive cost of building had almost completely put an end to operations unless excep- I ional circumstances, such as excessive rentals or the abso¬ lute necessity for space, led those interested to discard general conditions and build at any cost and at any hazard of competition at a later period. Such building as has been done during the period since {he armistice has not been on a healthy basis, nor for the lasting benefit of the allied industries engaged in it. There may not be as much profit in individual operations in the future as under the system of "matched bids" that had grown up under the tutelage, often, of men who had no real knowledge of the building business nnr any real interest in it except to get a percentage rake off on the amount of money involved, which it was to their interest to make as big as possible, even if the business as a whole was inevitably made to suffer. There is so much building to be done that there is no longer any need, if there ever was, for associations to see that "no mistakes were made" in bids. There is more construction work needed in Greater New York than can Ik done by all the builders, big and little, in this vicinity ill the next ten years. It is a certainty that fair profits