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Banned
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willravel, in my 1935 article on HOLC, 862,000 were initially granted mortgages which averaged $2,320 each. Economic conditions were much worse than today, but a look in 1930's house prices clearly shows that people paid less than $6,000,on average, for their homes:
Quote:
http://www.thepeoplehistory.com/30s-homes.html
Whenever possible we tried to pick a mix new or nearly new homes and plots of land to provide an idea of how much buying a home cost in the 1930's with 3 different homes from 3 different locations
Year
1930 House Morristown
New Jersey 2 family, 2 car garage, 11 rooms $9,500
1930 House Morristown
New Jersey 5 room family home $3,500
1931 Bungalow Lincoln
Nebraska 4 room bungalow with basement , gas , pine finish , full basement $2,100
1931 House Appleton
Wisconsin New Modern 5 bedroom Home $4,100
1931 House Oakland
California 8 room english style home 3 bedrooms , electric appliances, large basement $7,200
1932 House Middleton
New York New house 6 rooms and bath all modern improvements $4,200
1932 House Appleton
Wisconsin Modern 6 room house attached garage desirable location $4,500
1932 House Oakland
California English style home 5 big rooms every modern feature garage lawn shubbery $3,650
1932 Bungalow Lima
Ohio Modern Bungalow Basement 2 car garage furnace $2,500
1933 House Mansfield
Ohio 6 rooms , breakfast nook , enclosed porch, water softener, garage $4,000
1933 Spanish style House Oakland
California 3 large bedrooms , tile roof , big basement, furnace $6,200
1933 Farm Sheboygan
Wisconsin 10 acre chicken farm large basement barn and small house $1,900
1933 Cottage Fitchburg
Massachusetts 6 room , garage and large plot $2,800
1934 Stucco Bungalow Oakland
California 5 room stucco bungalow , breakfast room , seperate garage, delightful location $3,750
1934 Brick Home Mansfield
Ohio Brick built home 5 rooms modern in every respect $5,000
1934 Cottage Fitchburg
Massachusetts 6 room cottage all improvements on 1/2 acre $2,000
1934 House Sheboygan
Wisconsin 7 room house with bath and furnace, double garage and large lot $4,000
1935 English Type Home Oakland
California 6 rooms , 3 bedrooms, all electric kitchen, 2 car garage, close to country clubs $5,700
1935 Farm and House Mansfield
Ohio 160 acres with brick built house barns and spring fed water $4,000
1935 Brick Bungalow Lincoln
Nebraska 6 room brick bungalow large lot double garage 3 bedrooms den and loft $6,000
1936 2 story English Oakland
California 3 bedrooms social hall and double garage $7,150
1936 Land for sale Port Arthur
Texas Land for sale in 4 acre lots $200.00 per acre $800
1936 New House Mansfield
Ohio 6 roomed new house bath and sun parlour $4,400
1936 6 Rooms
New Jersey $5,000
1937 Colonial Home Oakland
California Brand new Moterey Collonial 6 rooms willow trees and large plot $6,750
1937 Cottage Port Authur
Texas 5 room home and bath in town center $2,250
1937 Lakeside Plot Appleton
Wisconsin Lakeside plot on Lake Winnibago 60ft X 200ft $500
1937 Colonial Brick Home Mansfield
Ohio 6 modern rooms and bath with open fireplace in living room $6,000
1938 House Appleton
Wisconsin 6 room home with full basement and hot water heater and garage $4,200
1938 Farm Mansfield
Ohio 71 acre farm with 6 room house , electricity and bath and large orchards $4,200
1938 House Hammond
Indiana 5 room house 1 acre plot with electricity $2,000
1938 Lakeshore Property Port Arthur
Texas 4 room home hot water lakeside views double garage $2,650
1939 English Cottage Oakland
California 5 rooms and sunroom in restricted area $5,250
1939 Modern House Mansfield
Ohio 5 room house large corner plot and double garage $2,400
1939 Bungalow Lincoln
Nebraska 6 room bungalow with gas heat 3 bedrooms , oak finish $3,250
1939 New Home Sheboygan
Wisconsin Newly built modern home fully insulated built in garage weather stripped new fully fitted kitchen $3,500
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Are homeowners in California today earning 80 or 90 times the amounts earned there in 1935? If not, today's asking prices are unsustainable. Look at the stress on the new HOLC government bailout in 1935. At most, unemployment was in the low 20's percent, and the cost of almost all consumer goods had deflated. Even with tiny mortgage amounts, those "bailed out" were in arrears in huge numbers.
There is no foundation for hope of anything but huge price delcines. Lending requirements, conservative appraisals, a lack of liquidity, and foreclosures, potential buyer's price direction expectations, and pent up selling forces will kill valuations. They were liquidity driven, not by earnings fundamentals.
It is so obvious what will happen. The only "out" is to destroy what remains of the dollar's purchasing power. Lack of demand from economic decline will make it impossible to engineer the inflation that would be required to do that. They've tried, with $100 oil. I would not want to be elected US president, next november. It will be a nightmare term of four years..... |