Real Estate Record

AND     BUILDERS'    GUIDE.





Vol. XVII.





NEW TOEK, SATUEDAY, JANUARY 1, 1876.





No. 407.





Published Weekly iy

THE REAL ESTATE RECORD ASSOCIATION

0. W. SWEET___...........Pbesident and Tbeasuber

PRESXON I. SWEET...........Seobetabt.

L. ISRAELS.........................Business Manageb

TERMS.
OirS YSAR, in advance___$10 00.

Commanications should be addressed to

Nos. 3i5 AND 347 Bboadwat.





THE CRISIS IN REAL ESTATE.





Pursuing our investigation, we present an¬
other budget of causes that lie at the root of our
present difficulties in real estate.

TBABB KSD OOMMEBOI.

That the chief value of oar real estate de¬
pends upon the commercial supremacy of our
city is a platitude on which we need not dwell.
It is the office of the historian to trace the
growth, extent, and relative conditions of that
supremacy. We here deal with, the relations of
commercial prosperity and adversity to real
estate values, and ynM endeavor to study the
methods and ways whereby the enormous fruits
of that supremacy are attracted to real estate
investaients, and the causes and conditionB un¬
der Which they are withdrawn—in a word, to
define the strictly legitimate phases of real estate
toansactions and their vicissitudes.

No city in the world presents a larger area
of land held in fee simple or freer from en¬
tangling leasehold interests, none, we surmise,
where; land is usually more marketable and ne¬
gotiable, and few where land of equal range of
value is more subdivided in ownership, though
Its subdivisions do not yet bear a healthy ratio to
population.

We will pass over, or reserve for future con¬
sideration, that select number of landed proprie¬
tors, individual and corporate, the fortunate lega¬
tees of priacely demesnes, who to-day uniquely
characterize our metropolis. Their business and
study are the conservation of property, and the
production of income theirefrom. Owning by
inheritance, they are not annoyed by a profit and
loss account; beingJinnooent of mortgage debts,
and possessing redundant rent-rolls, the decrees
of court and sheriflfs writs have no terrors for
them. - They constitute the stable and reliable
residuum,- the strong bulwark, the sturdy and
unflinching.backbone of New York real es¬
tate. They form the negative pole of the real
estate magnet which holds in equilibrium the
oscillating forces of value, and pre-enuxently
represent the portion that weathers panics, wars
and crises, emerging therefrom- with unbroken
ranks and unruffled fronts. We can name of
Buch estates- the Astor, Goelet, Beekman, Rhine-
lander, Stuyvesant, Cutting, Lenox, Hoflfman,
Jonee, Spingler, and a score of smaller ones of





less renown. Of corporations, of like status and
pedigree, we inention Trinity and Dutch Church¬
es, Sailors' Snug Harbor and New York Hos¬
pital, Columbia College, and, last and largest, the
City Corporation—all conspicuous among a small
host of others. Such owners never or rarely sell
and seldom, if ever, buy. They represent highly
crystallized and inert masses of capital, scarcely
coming within our immediate purview.

We will exclude also from this category the
professional speculators or operators, vampires of
honest investment—the functions sustained by
them towards the market requiring separate
treatment. Their dream of success is realized in
high and constantly increasing values; their
greatest abhorrence, the inevitable coUapse that
follows inflation and the oblivion to which it
consigns them. Some day we hope to see writ¬
ten a scientific treatise on speculative anthropol¬
ogy. In such a work we are sure the-land spec¬
ulator will take high rank, as embodying pecu¬
liar and distinctive elements. Courage in excess
of capital, hope unrestrained by caution, cre¬
dulity that borders on fanaticism, fortitude and
grit unimpregnable, placidity under overwhelm¬
ing difficulties, and an heroism almost sublime
make up a few of the characteristic traits that
to-day find many a sad and painful illustration.

We will divide the legitimate purchasers of
real estate into two classes—the capitalist in¬
vestors and the house-buyers. Under one or the
other of these heads may be ranged nearly all
the bona fide outlays in real estate.

The capitalist may be a retired merchant or
manufacturer, or an active business man whose
getting hand easily rolls up a redundant an¬
nual income, or a mere graduate from the in-
tenser schools of speculation, who seeks to plant
the fruits of his ventures in the more stable soil
and under the calmer atmosphere of real estate
investment. These men are usually self-made,
of trained faculties, shrewd and wise above their
fellows, abhorring sensation or sentiment, and
keenly scenting bogus and fictitious schemes
and values; they rely upon foresight rather than
enterprise; upon calculation more than courage.
Low, intrinsic values alone tempt their capital—
a rising or inflated market is apt to find them
sellers, not buyers; and then investors on mort¬
gage to await the ebb of the tide. The dis¬
tinctive principle ol this class is to own land
absolutely and without mortgage debt, thus
applying the test of ready money to the
purchase price. They are the true conserva¬
tors of values, and the direct antipodes
of the speculative adventurers of all classes^
During the heyday' of speculation and soaring
prices this class keeps studiously aloof, leaving
the speculators to the enjoyment of their own
ground-and-lofty tumblings. No amount of
garish and fictitious prosperity could deceive
their wary and subtle judgment. They re¬
cognize the solidity  of real estate  interests.





but never lose sight of the all-important ques¬
tion of values. Their investments made at bed¬
rock prices defy panics and crises, and are ever
blossoming with moderate and reasonable gains.
These men constitute the legitimate real estatie
market, and their judgment goes far to de¬
termine intrinsic rates of values. Their pro¬
longed withdrawal is a' sign that prices have
attained an unhealthy and inordinate range;
their re-entrance is one of the first assur¬
ing signs of returning thrift and pros¬
perity. The conspicuous absence of such in¬
vestors during the past five years was strong
confirmation of the artificiality of the existing
conditions. What a man pays for in full is a
criterion of his judgment; but what he pays for
in part, and that the smallest fractional portion,
may be a freak of fancy or a vicious impulse.
In the nature of the men who handle them, we
thus* see that the mammoth profits of trade
seek resting-places in real estate only at excep¬
tionally low levels of value, and that the furor
and mock activity ot speculative times are the
mere, devices and effects of speculative dramat¬
is personce. The present cessation-of specula¬
tion and recession of values must, ere long,
attract this strong and coniservative element,
and thus impart the healthy stimulus of moder¬
ate activity at low and stable prices to the pres¬
ent lethargy of the market.

The house-buyers, the house-holders in esse or
in future, of our city represent a thrifty, forehand¬
ed, public-spirited body of men. They are the
very life and marrow of our real estate interests,
the incentors and rewarders of development and
improvements, without whose succor and en¬
couragement the portion of our city above
Forty-second street might to-day be a lonely
wUdemess, and the site of Central Park an oasis
of squatter sovereignty. The house-buyer of
New York is the present mainstay and future
hope of our city's greatness. Corporations, es¬
tates, investors, and speculators, might sigh
in vain for returns Irom their land tenures, were
the present or prospective house-wanters un¬
generous or mythical personages. The speculator
may schem«> and devise, thebuildermay digand
delve, the capitalist may count his dollars and
oast his interest, but to the close and exacting
gauge of the house-buyer must all values be ul¬
timately subjected. Our commercial supremacy
makes our land desirable; the wants of the
house-buyer fixes its value.

Our dwelling-house buyer is a representative
man, the model of conservatism and the true
conservator of morals. We have known him as
the artificer of his good fortune, who has cleaved
his way in life and who claims the privilege of
counting his dollars and testing their purchas¬
ing power. Thoughts of land speculation may
have never entered his mind, but he has cherished
from childhood the expectation of sitting be¬
neath his own vine^and fig tree^of crossing his