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JULY 1955 business review FEDERAL RESERVE BANK OF PHILADELPHIA AMAZING DEMAND FOR HOUSING ng record defies explanation, but one thing is sure: ayments and long maturities have stimulated er the next few years credit terms may become portant. CURRENT TRENDS As the economy pushes to new high levels, more vacation dollars are being spent in Third District resort areas. Additional copies of this issue are available upon request to the Department of Research, Federal Reserve Bank of Philadelphia, Philadelphia 1, Pa. THE AMAZING DEMAND FOR HOUSING Pick up a business periodical these days and formed and the rising number of housing chances are that much space is taken up by a units started mean that we are in for review of the housing situation. Chances are also trouble? strong that somewhere the words “ over build 3. What about mortgage debt? Is the current ing” will appear— usually preceded by a ques level too high, or are the terms too liberal? tion. That a majority of those asking themselves, “ Are we over-building?” resolutely respond 1. HOUSING — FEAST OR FAMINE “ No” cannot alter the fact that so many feel The housing industry has been characterized by called upon to ask themselves this question. extreme instability. Just look at an historical What causes so much uneasiness in the midst of the present bright housing picture? record of housing starts. Notice the wide fluc tuations in the figures. In 1925, housing starts hit a pre-war peak of 937,000. In each subse quent year the number of starts declined until in 1933 onlyW3,000 new units were started. It is to some quite surprising that the demand for housing should be subject to such wide swings. After all; next to food, shelter is the greatest need of consumers. Regardless of cli mate, people need shelter. People can live com fortably and happily without many of the comforts and luxuries of modern civilization, but without shelter they cannot live at all. Is it any wonder that some are puzzled by the past record of violent changes in housing starts? An answer to this over-all question lies in the answers to three subordinate questions: 1. Why has housing always been an industry of boom and bust? 2. Does the current spread between the de clining number of net new households Need alone, however, is not enough to make demand effective. Spending power is important too. But the record of instability cannot be ex plained simply by changes in income— actual or deflated by changes in price. The fact is hous ing is one of the industries with a good deal 3 b usin ess r e v ie w CHANGES IN INCOME AND HOUSING STARTS housing services. When the production of hous (1920-1954) ing increases, the addition to the total stock of INDEX 1929 = 100 housing is small; so the flow of services from the stock increases by only a fraction of the increase in production. This means that if the demand for the total services of housing declines, the demand for new housing units will decline by a greater percentage. If the demand for the total flow of housing services rises, the demand for new housing units will rise more rapidly. The fact that small changes in the demand for total housing services bring about large changes in current production centers attention on the factors behind the demand for housing. 2. HOUSEHOLDS AND HOUSING STARTS The demand for housing may be divided con veniently into two parts. One might be called quantitative or basic demand, and the other * 1 9 2 0 - 2 8 ESTIM ATED SOURCE: LA BO R , COMMERCE qualitative. Basically, the demand for more hous ing services depends on population factors. With of influence over fluctuations in the level of income. Look population increasing rapidly, mainly as the at the above chart and you result of a large number of births, this would will see this at a glance. From 1925 through seem to lead to rosy conclusions about present 1929 incomes were rising, yet housing starts and prospective demand for housing— not to declined each year. After 1929, incomes started apprehension about over-building. But children falling too. This chart has caused some to con don’t buy houses. A more important source of clude that declining expenditures on housing demand for housing is the number of net new were not only an important forerunner but per households formed each year. haps also a cause of the Great Depression. Durability plus the large volume on hand at any given time, more than anything else, ex W hat is net new household form ation? Assuming you know the number of occupied plains the boom-bust aspect of housing history. housing units, it is easy to estimate the number The dominant characteristic of houses is their of net new households formed each year. The durability or longevity. Houses give service over number of households is equal to the number of a long period of time. occupied housing units. So the number of net If building volume de clines, or if no houses are built in a given year, new households formed each year merely repre the services of the existing stock continue to be sents the difference supplied and used. Since so few units wear out occupied houses in succeeding years. It is influ there is hardly a noticeable difference in total enced by the number of marriages and divorces, 4 between the number of b usin ess re v ie w which in turn are influenced by the number of ing units in succeeding years. This is empha people reaching marriageable age and the effects sized because frequently it is said, “ Oh, yes, of social and economic influences on marriage marriages are down but more older people and and divorce rates. The net household formation young, single people are able to set up and figure also includes those who have “ undoubled” maintain their own homes, and there is less — moved away from the in-laws and set up a doubling up.” This is all true; it is also true that household of their own. Of course, single per older people and young single people maintain sons of all ages who maintain their own house ing their own households are included in the holds are a part of this figure too. It is an figures, past and projected, for net household all-inclusive figure and means that when housing formation; and the figures are still low. starts exceed net new household formation the The black line in the chart indicates the difference has to represent vacancies, demoli number of new housing units started each year. tions, or dwelling units otherwise removed from Since 1950, housing starts have been exceeding the housing market. net new households being formed. From March Projecting into the future the number of new 1950 to April 1954, units started totaled about households that will be formed each year is tricky business. Fortunately, the Department of Commerce and the Bureau of the Census do all of this figuring for us. HOUSEHOLD FORMATION AND HOUSING STARTS MILLIONS Housing starts exceed net new households As you can see from the solid white line on the chart, net new households have been declining since 1949. The Census Bureau projects an aver age level of household formation only slightly above that of 1954 over the next five years. The lower levels of household formation reflect in large part the low birth rates of the depressionridden 1930’s. The infants of the depression era are now reaching marriageable age and there just aren’t too many of them. The result: fewer marriages, fewer families being formed, and fewer net new households. Little further change in the size of the group reaching marriageable age will occur in the next few years. During the 4.9 million as compared with about 3.3 million 19C0’s, however, a substantial rise is expected. households. Recently, the gap between house It is important to remember that the figures hold formation and housing starts has been wid for net new household formation in this chart are all-inclusive. To repeat, the figures measure ening. This suggests an excess of supply over the difference in the number of occupied hous viewing the future of housing with foreboding. the primary source of demand— one reason for 5 b usin ess r e v ie w Obsolescence— basic to housing demand housing only once in about 150 years. This type While net new household formation is a measure statement may seem to imply that we have 300,- of the basic demand for housing, it is not the 000 housing units that are 150 years old each only one. Obsolescence is another basic factor in year; this is not the case. Very few analysts housing demand. Obsolescence, however, is an assume more than 150,000 housing units become extremely difficult thing to measure. As a mat so obsolete as to require replacement each year. ter of fact, it is an extremely difficult thing to This is the number where obsolescence is a define, particularly with respect to shelter. There is a lot of talk about what the passage physical fact; the house is worn out. of time does to houses. Some say houses have a Upgrading ups replacem ent demand 40-year life or a 60-year life or even a 200-year But obsolescence is a relative concept. How soon life. The impression given is that houses are like a house becomes obsolete depends on a host of the “ one-horse shay.” Actually, with adequate things like income levels, technological changes, care, houses can last almost indefinitely. What and changing tastes. Thus a house that seemed usually happens is that neighborhoods change livable at one income level may seem obsolete gradually or houses get very expensive to keep or at least in need of replacement if incomes up. Plumbing wears out; termites get in beams; rise. This type of change in demand might be the roof needs replacing; the heating plant stops thought of as qualitative, and differentiated from working. While houses are running down in rock-bottom value, rents decline. That is how lower-income household formation and physical obsolescence. families get homes they can afford. It is a filtra tion process. or basic demand flowing from Recently, this qualitative replacement demand has become more and more important. If we are The White House is an example of what age to continue building housing at present rates can do to a house. During President Truman’s over the next few years, this type of replacement term, the floors sagged and ceilings fell. The demand will become even more important. What President and his family moved out lest the are the forces behind this demand? place collapse. Experts estimated the cost of The factors commonly expected to sustain the repairing the White House and admitted that a demand for housing are a revision of consumer brand new building would cost only about half preferences in favor of housing, rising incomes, as much. Due to the historical significance of a high birth rate, migration, and the availability the White House, sentiment overruled pocketbooks and it was repaired. Most people with a play a more important role in the future demand private home in a similar situation would rebuild. for housing, we shall examine each of them. of mortgage money. Since these factors may There is no easy way to tell how many houses or for that matter how many have been demol Little chance consumers will devote larger part of income to housing ished because of obsolescence over the past few Incomes in the post-war period have been high would become obsolete between now and 1960, years. Some articles remind us that if we build and are still rising. as many as 300,000 units a year for replacement some analysts seem to doubt that we are having only, we would replace our present stock of any housing boom at all. They point out that 6 Against this background, b usin ess re v ie w residential construction expenditures in constant dollars averaged $10 billion in the 1950-1954 period and $10 billion in 1925-1929. In other standard of housing only if the costs of the car were removed from the family budget. Finally, casual observation seems to indicate words, no increase in real spending on housing that at least has occurred despite a 40 per cent rise in real greatly bettered their housing standard since the income. I Income corrected for change in prices.) 1925-1929 period. the lower-income classes have It is probably among the Likewise, it is pointed out that residential con upper-income groups that housing has suffered struction expenditures accounted for only about a decline. This is understandable in view of the 3Yz per cent of gross national product from housekeeping problems created by a large house. 1950 to 1954, as compared with 7 per cent of Domestic servants are much harder to find than G.N.P. from 1925-1929. These studies provide a formerly. comforting conclusion to the question, are we These observations warn us that it is unsafe on to sit back and expect a revision of consumer pages 8 and 9— can be made to prove almost preference in favor of housing. Times have over-building? anything. But statistics— as shown Here are a few observations that raise doubts as to the interpretations attached changed and so have consumers’ conceptions of a house. to studies relating housing expenditures to total spending. Consumers may not be spending as much of But rising incomes m ay speed replacem ent their incomes on shelter but they probably spend On the other hand, it is possible that as incomes much more on many kinds of consumer capital increase, families will at least devote a propor related to the house. Statistical measures of tional share to bettering their housing. This is residential construction expenditures depend on likely especially if builders succeed in imparting an arbitrary definition of items to be included to their product some of the characteristics of or excluded. This definition falls increasingly other consumer durables. For some time now the short of the full cost of a housing unit as the housing industry has been talking about how consumer sees it. For example, while certain nice it would be if people would change old consumer durables such as oil burners are in houses for new at a more rapid clip. There is the housing figures, others like refrigerators, some evidence of headway in this direction. washing machines, washers, garden dryers, equipment, automatic storm dish Certainly, the fact that low-income families windows, are becoming fewer and families earning $5,000 and Venetian blinds are not. If the definition of or more annual income are increasing must at residential construction expenditures included least help shape a more rapid replacement mar these items, spending on housing would be rela ket. A good part of the building that has taken tively stronger than present measuring methods place in the post-war period has been to service indicate. families in the $3,000 to $5,000 income group. The housing boom has featured a movement As many of these families move into the $5,000 to the suburbs. Suburbanization makes the auto and over income group, there is good chance mobile a nearly necessary part of home owner that they will want to upgrade their housing. ship. Many families could return to their 1929 ( continued on page 10) 7 1. O ver the past 45 years home building has averaged about 4.5 new dwelling units annually for each 1,000 per sons. Since the end of the war it has averaged 6.3 units. R ATIO OF HOUSING TO P O P U L A T IO N PER IOOO STAR TS 5. From 1930 to 1954, the actual rate of building annually has been only 4.0 dwelling units per 1,000 p o p u la tio n as against a "normal" of 4.5 units. P ERSONS 1910-1954 AVERAGE 1945-1954 AVERAGE ARE WE OVER-BUILT? Statistics can support either answ er 1 9 3 0 -1 9 5 4 AVERAGE Those who argue that we are not over-built use the 19301954 period to prove their point. Although we "normally" AVERAGE HOUSING STARTS 1 9 3 0 -5 4 M IL L IO N S woul d h a v e c o n s t r u c t e d 15.530.000 units, actually only 14.360.000 units were built. According to this argument, we seriously under-built in the 1930-1944 period, and even with the large volume of build ing since 1944 we have not caught up. (Of course, since 1910 wide fluctuations have taken place, from about 8 houses per 1,000 population in 1925 and 1950 to less than one per 1,000 during the great depression.) HOUSING S T A R T S 1 9 4 5 - 5 4 2. About 9,600,000 dwelling units have been built in the post-war period. On the basis of the 45-year average, we would "nor m ally" have built only 6,800,000 units; so that means about 2,800,000 "surplus" units have been built. M IL L IO N S ’ NORMAL" _____ V A LU E OF R E S ID E N T IA L C O N S T R U C T IO N CO M PARED W IT H G.N.R 3. In 1953, the value of non farm housing was I I 7 per c e n t of i ncome. In 1929, when many feel we had adequate housing rela tive to income, it was 109 per c e n t of i ncome. VALUE OF HOUSING COMPARED WITH AFTER-TAX INCOME PER CENT VALUE OF REPAYMENTS OF MORTGAGE DEBT COMPARED WITH DISPOSABLE INCOME MORTGAGE DEBT OUTSTANDING COMPARED WITH NATIONAL INCOME PER CENT 1 9 2 5 -2 9 AVERAGE * ESTIMATED 4. Mortgage debt income is larger mortgage debt cent of income. 22.4 oer cent. in relation to now. In 1954, was 25.3 per In 1939 it was 7. Further, residential construction expenditures as a proportion of G.N.P. are still below the late 1920's. If the best measure of debt is the claim it makes on income, b usin ess r e v ie w The chart below shows that families earning less More rapid replacement as a result of increas than S3,000 and between S3,000 and S5,000 are ing incomes would involve, in the long run, declining, while families earning in excess of a sharper decline in prices of old houses relative to new. Ultimately, of course, it involves dis S5,000 are increasing. placing the poorer part of the housing stock NUMBER OF NON-FARM FAMILIES BY INCOME GROUPS long before present standards of physical obso lescence set in. This would be a revolutionary change in the character of the housing market. (Selected Years) On a long-run basis, the housing market seems MILLIONS to have been primarily a growth market with additions to stock equalling growth in the num ber of households. Perhaps with substantial changes in style, design, and quality, builders will be able to generate a replacement market. Children need room to grow Previously in this article it was mentioned that children don’t buy houses; that is true, but they certainly yell loudly and long for more living space. Many homes built right after the war had just two bedrooms. As the number of families with a second, third, and fourth child increases, these homes become inadequate. This tends to create a new market for larger houses by these second-time buyers and to enhance the possibil ity of a more rapid replacement market. As people move from one income class to another and presumably buy more expensive Migration feeds demand houses, they must sell the place from which they It is a fact that about 5 million people a year move or if rented, their landlord has to find a move from one state to another. Another 5 million new tenant. Thus there is no real increase in move from one place to another within the same demand for new houses unless this process filters state. Net migration from farm to city has added down and someone moves from a house or an measurably to housing demand. Over the decade apartment, which then stands vacant, is demol to 1950, the number of occupied farm dwelling ished, or otherwise removed from the housing units declined by about 1 million. Since nearly a market. As this process takes place, the tendency million farm houses were built over this period, is for vacancies to rise. Historically, few units the number vacated was greater than a million. seem ever to be torn down unless it is to make way As a result, in 1950 the Census found about 10 for more intensive use. per cent of all farm dwellings vacant. Most of (Tear down a single family house to make room for an apartment.) 10 the vacant farm houses were dilapidated and busii ■lew otherwise unavailable for rent or sale. Since home. This sort of change exerts particular 1950, the net migration from farms to the city pressure on families who already own a home. has continued, leaving an increasing number of Chances are the equity they had in their homes vacancies. Many of the vacant dwellings again can be used on a more expensive place. With are unavailable for occupancy and not a part the lengthened maturities permissible under the of the total housing supply. housing act, the same monthly payment would There is much said about net migration from enable a family to buy a somewhat more expen the center city to suburbs. This kind of migra sive home. For example, the monthly payments tion probably has added to housing demand in on a $12,500 mortgage amortized over 20 years the short run, but the elfect on available hous is about the same as for a $15,000 mortgage ing units is not the same as when there is a net over a 30-year period. movement from remote farm areas to metro politan areas. When the net migration is from 3. THE MORTGAGE DEBT LOAD city areas, the housing units left behind are There is some reason to wonder how much likely to be available for rent or sale to others. longer replacement demand for housing can or should be stimulated by easier credit terms. Much A vailab ility of m ortgage money of the current apprehension about the housing The influence of the availability of mortgage situation and the alleged over-building stems from money on housing demand would seem to be a feeling that the mortgage-debt load is already come greater as replacement demand rises in importance. Replacement demand arising from too heavy for the economy to carry. No analysis of the housing situation is complete without higher incomes, more children, and migration attempting to appraise the soundness of the appears more likely to be postponable than basic present mortgage-debt structure. demand from household formation and physical obsolescence; hence credit terms become a Most observers recognize the naivete of merely comparing the size of mortgage debt today with some year in the past, whether or not “ normality” larger consideration to more customers. The importance of terms is apparent in recent is implied. Our economy has grown tremendously, and long incomes have risen, substantial changes in the maturities were major forces behind the enor purchasing power of the dollar have taken place, mous housing demand in 1954. and our population and number of households experience. Small down payments It is not too difficult to understand why hous have greatly increased. ing demand generated by a desire for upgrading It is not so well recognized but it is probably would be responsive to liberalized terms. The equally unsound merely to compare mortgage house-buying power of a given income can be debt as a proportion of personal disposable changed considerably by the nature of the terms income with some other year. Mortgage con of purchase. The Housing Act of 1954 changed tracts have changed considerably over the years. FHA down-payment requirements so that, for For example, in the 1920’s the typical mort example, a gage contract was of short maturity, did not pro $15,000 home. Prior to the change, in excess of $2,000 down was required to buy an $11,000 vide for full amortization, and very frequently carried interest charges of 6 to 8 per cent. Today, about $2,000 was sufficient on 11 b u sin ess re v ie w mortgages typically run for 20 years, provide of the debt is such that a small part of it would for monthly amortization, carry interest charges probably not withstand downward pressures on of 4V2 to 51/) per cent, are first mortgages, and real-estate values. It would be dangerous for this are frequently underwritten by Government in small part to grow significant in the future. surance and guarantee programs. Perhaps the best way to test the soundness of Conclusions mortgage debt is to measure the actual or poten Historically, the housing industry has been sub tial claim it makes on current or prospective in come. The size of the claim mortgage debt makes ject to violent ups and downs. It is important, on income depends principally on interest rates, demand for housing. In the long run, the hous therefore, to examine causes of change in the mortgage maturities, and the level of income. ing market has been a growth market with addi Generally, longer maturities prevail now than in tions to stock roughly the same as growth in the any pre-war year, and interest rates are as low number of households plus replacement of physi or lower. Thus although mortgage debt today is cally obsolete houses. equivalent to 30 per cent of disposable income number of housing starts has been running well In the recent past, the as compared with 23 per cent in 1939, regular beyond the rate of household formation plus payments on mortgage principal and interest physical obsolescence. The difference has been absorb about the same proportion of spendable made up by more rapid replacement or a general income. Compared with 1929, the methods of upgrading. The factors such as rising incomes, repaying home-mortgage debt today are so dif high birth rates, migration, and ready availabil ferent as to preclude comparison. It seems cer ity of mortgage money have propelled this rapid tain, however, that mortgage-debt repayment is replacement demand. In order to maintain pres considerably less burdensome today. By this test, ent levels of housing starts over the next few the present level of mortgage debt does not years, replacement demand will have to become appear too high,, at current income levels. even more important. A broader replacement On the other hand, it should be emphasized market involves a faster decline in the prices of that mortgages written on easy terms are jeop ardized by the slightest downturn in the value mand is probably more readily postponable it is of existing houses. For example, on a 30-year more sensitive to changes in mortgage terms. no-down-payment loan, after five years just 8 Mortgage debt at present does not appear too per cent of the unpaid balance has been paid off. burdensome, but the composition of the debt is Any values such that a small part of it would be left exposed would leave some mortgages exposed— unpaid by almost any significant decline in real-estate mortgage balances exceeding market values. So values. This makes it somewhat dangerous to that even though the present level of mortgage debt stimulate a more rapid replacement market by is probably not too burdensome, the composition further liberalization of mortgage terms. 12 significant decline in real-estate old houses relative to new. Since this type de b usin ess re v ie w CURRENT TRENDS Those Busy Vacation Dollars Business so far this year has been a succession resorts within our borders, we are impressed by of pleasant surprises. Late last year, when it be the optimistic predictions concerning the 1955 came obvious that we were on the road to recov vacation season. A brightening employment pic ery, most observers expected business to increase ture, which means more “ take-home” pay, ap further this year. But “ recovery” has been an pears to be creating the kind of atmosphere in obsolete term for several months now. The econ which people really enjoy making plans for their omy seems to be pushing on to new and unex annual period of relaxation. As this is written, plored territory. even “ Old Man Weather” seems to have been The new boom has been supported by unex doing his part to speed up preparations and pectedly large amounts of spending for automo bring into focus the finer details of another biles and houses. Businessmen, revising earlier summertime vacation. plans, now also expect to spend more for plant and equipment. The most recent of pleasant sur Advance reservations have been heavy prises has been the ease with which labor and At resort areas along the Delaware and New management reached agreements in the auto Jersey coasts and vacation spots in the Pennsyl mobile and steel industries. The most pleasant surprise of all would be if vania mountains, local bankers and businessmen tell us that the hotels have received many more the economy continues the recent rate of expan inquiries this season than last. Actual reserva sion in the face of almost certain adjustments in tions seemed a little disappointing at first, as is spending for cars and houses. Sentiment seems usually the case when there are periods of cool, to be swinging toward the optimistic view that wet weather. other types of spending, particularly capital ex became the rule, bookings for July and August But as summertime temperatures penditures by business, will step in to take over. came in with a rush. Cottages also were taken On the other hand, it might be well not to up slowly until Memorial Day, although here expect too much. It should not be too serious for too vacationers started looking quite early in the economy to slow down for a breath— unless the season. Housekeeping apartments in some of we make it too serious. Perhaps it is a good the larger shore resorts have not been renting as thing that the transition comes at this time of fast as their owners might wish, but the demand year. This is vacation time-—a time to take things for these accommodations is improving steadily. less seriously. Summer camps in the Poconos are said to be It looks like a good season for the vacation business children closed their books long before school filling up rapidly and some of those catering to was out. Other resort areas like Boiling Springs In some parts of this district, however, vacation in southern Pennsylvania and Eaglesmere in the time is a time for serious business. And from a north are looking for one of the best seasons brief check-up of the seashore and mountain ever. 13 b usin ess re v ie w New roads and bridges attract guests from g reater distances petition for less modernized rooming houses and even some of the older hotels. In New Jersey, the opening of the Garden State To be sure, motels cater primarily to shorter- Parkway has brought places like Cape May, staying guests in all the resort areas. But the Wildwood, and Ocean City within three hours’ weekends at both seashore and mountains have driving time of New York City. Some New Jer become an increasingly important part of vaca sey coast resorts always were popular vacation tion business. Most resort people will tell you the spots with New Yorkers. The New Jersey Turn pike with its convenient interchanges to shore “ weekenders” are good spenders; only a few say they simply add to the crowds. This year, points increased this popularity. But the Garden Memorial Day weekend at the shore was an State Parkway, running nearer the coast, provides early-season record breaker and in some parts an even more direct, high-speed route to virtu of the Poconos accommodations of every sort ally all the famous bathing beaches. This year, were filled to capacity. The July Fourth holiday hotels, guest houses, and cottage owners report period seems to have given a repeat performance inquiries and many reservations from people living in a wider area of New York State and — only on a somewhat grander scale. even in southern New England. spots reported the largest crowds and some of Rehoboth Beach in Delaware counts the Chesapeake Bay Bridge among its many bless ings because it draws a lot of vacationers from the Washington and Baltimore areas. In the In the period between these holidays many vacation the heaviest spending ever seen at that time of the year. Retail sales are climbing seasonally Poconos of Pennsylvania, new bridges and im Merchants in the shore resorts, where retail vol proved highways have made this whole moun ume is such an important part of the summer’s tain resort area more accessible to visitors from business, appear well satisfied with the rate of both New York and northern New Jersey. And to improvement that has taken place in recent various vacation spots in the Blue Ridge Moun weeks. In many instances, sales ran somewhat tains near the Maryland border, the Pennsyl behind last year’s level until mid-June. The vania Turnpike offers quick transportation from weather was cool, there were rainy weekends, so the east and west. summer merchandise moved slowly. But in the past several weeks, dollar volume has picked up Motels are increasing in popularity everyw here popular vacation spots, retailers say business in From every major resort area in this Federal the past two weeks has exceeded last year’s level Reserve District comes word that many more by as much as 10 per cent. Restaurants also re motels have been built this year. Some of them port a marked improvement through the week, are much larger and offer far better accommo with their establishments operating at capacity dations than those built earlier. Current reports over weekends. Amusements and other board indicate that occupancy in these establishments walk concessions are said to be well patronized, sharply in nearly all lines. In some of the more has been exceeding expectations and that their and expressions of opinion all seem to point to up-to-date appointments are creating stiff com one of the best vacation seasons in recent years. 14 b u sin ess r e v ie w Parking problems and the w eather are the only question m arks resort areas venture a forecast for the current season they always do so with one reservation— that is, the weather. This season our first two What to do with the automobiles that bring holiday weekends left nothing to be desired, so vacationers to the New Jersey beaches seems to a lot of earlier records went by the board. In be the number-one problem this year. Every fact, there have been some fine weekends and resort from Cape May to Toms River is making longer stretches of good vacation weather since concerted efforts to ease the situation that has the middle of June. A somewhat better-than- grown with the new superhighways and so many seasonal volume of early vacation business has more people owning automobiles. Parking space been becomes really critical over weekends and there owners, and retail merchants are never too con is growing concern over the possibility that any cerned about the first three weeks of July be aggravation of this situation may discourage a cause so many plants close down for vacation in significant number of visitors who come more or that period. But thereafter comes the question less regularly in these periods throughout the mark. August is often a “ tricky” month at the season. seashore because of “ northeasters,” and in the When businessmen or bankers in any of our the result. Hotel managers, restaurant mountains it can be much too cool as well. 15
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