Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 91, no. 2360]: June 7, 1913

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REAL ESTATE BUILDERS AND NEW YORK, JUNE 7, 1913 iiiiiSai^^ IVJ THE BIG MORRIS PARK AUCTION SALE Lots Bought For a Rise, Many of Them By Out-of-Town Investors, At Good Prices—A Week of Remarkable Investment Contrasts. ■lillili! ■ililllillllllllllllllllMlllllllllBillllilllillW THE creditors for whose benefit the State Banking Department is liqui¬ dating the old Morris Park race track property have reason to be satisfied with the big auction sale that has been under way on the premises since last Saturday. At the time this is being written l.SSfi lots have been disposed of for $1,631,000. Ten years ago the financier whose ex¬ ploits have brought about the present liquidation purchased the tract for $300,000. If the 1,463 lots that are still lo be auctioned ofif bring the same average price, $1,048, as those already struck down, the sale will realize some $3,150,- 000. In other words, property bought ten years ago at $1,000 an acre is now selling at better than $1,000 a lot. Yet a large proportion of the lots are as innocent of sulisurface street improve¬ ments as they were then. This is not saying that the lots are not worth what they are bringing. It is merely a reitera¬ tion of a well-known fact: that there is substantial value in real estate on the line of progress of the city's growth. There are several other notable phases of this sale. Perhaps the most remark¬ able is that it met with any degree of success at all in a week when security prices on the Stock E.xchange reached the lowest point which they have touched since the panic of 1907. .\t least 5,000 people, quite a sprinkling of them out- of-town investors, were attracted to the sale; and, there was capital enougli at command to take up an unprecedentedly large ofifering of vacant lots, while securi¬ ties went begging because of a world¬ wide money stringency. This interesting phenomenon is no doubt capable of more than one interpretation. But it is only fair to assume that buyers who have looked forward to a sale for months are acting upon reasoned convictions. Pos¬ sibly, under e.xisting industrial, political and financial conditions, they delilierately prefer exclusive ownership of concrete property; that is, the demand for lots developed at this sale may be another manifestation of the temper which is seen in the current tendency toward hoarding of money. .A.S to the prices obtained, there is no evidence yet of the expected "sacrifice." .-\t this writing agents commissioned to pick up genuine bargains have bought very little indeed. The prices paid have turned out to be, on the whole, as fair to the sellers as to the buyers. They show a big recession froin boom times, now distant, but they show an advance over valuations of recent years. They could not have been obtained before the dual subway contracts becatne a cer¬ tainty last spring. The tax assessments representing market values of last sum¬ mer average only about 60 per cent, of this weeH's auction prices. As a matter of fact, the valuations established at this sale are likely to be accepted as standard for current apprais¬ als. This assertion may not appeal to a certain minority who live entirely in the past and who refuse to recognize that capital values are afifected by a general rise in the rates of interest on money. It may be urged that the great number of lots offered have a depressing effect on prices. But, on the other hand, no other lot offering has ever been so extensively or so ably advertised; and any deficiency of local buyers was made up lij- the presence of out-of-town pvir- chasers, whose investments were on a generous scale. Finally, the sale was an ideal one from the buyer's standpoint. It was announced as absolutely unpro¬ tected, and the announcement to this effect v/as backed by the State Banking Department. A real estate auction sale which is so notable intrinsically, and which has been so widely advertised—fully one hun¬ dred thousand is said to have been spent on publicity—must be an event of signifi¬ cance from different points of view to readers in various occupations and pro¬ fessions; and for this reason we bring to¬ gether the following comments on it by persons whose opinions carry weight be¬ cause of special opportunities for obser¬ vation or of particular knowledge con¬ cerning prices, contemplated street im¬ provements, or transportation facilities. Raises Value of Adjacent Property. In my opinion the sale is making ex¬ cellent progress. The prices lots are bringing are remarkable for an auction sale, and they are having a stiffening effect on neighboring property, some owners of which, judging from the prices paid at this sale, have come to the con¬ clusion that they liad undervalued their own holdings. I will cite an instance of my own experience. An owner listed a 45-foot corner near the Morris Park property with me, to sell at $3,500. I procured a purchaser, who agreed to buy at that figure. On the day the contract was to be signed the owner jumped his price to $5,000, based on the prices Morris Park lots were bringing. The result was no sale. He has since shown me an offer of $4,700, which he has refused. The sale should help The Bron.x. Its unquestioned success must establish a great deal of confidence in Bron.x 'real estate. GEORGE PRICE. Testifies to the Public Confidence. In response to your request for an opinion regarding the auction sale of the old Morris Park race track now in progress, I would say that I am im¬ pressed with the fact that, at this writing, there have been gold to builders and in¬ vestors more than 1,300 lots, at an aver¬ age price in excess of $1,000 a lot. If the sale progressed no further, I would still think it a great achievement that testified in a notable way to the under¬ lying public confidence in New York City real estate. In view of money and general mar¬ ket conditions, the ability and willingness of the public to respond to this sale in so substantial a tnanner must be ex¬ ceedingly gratifying to everyone inter¬ ested, either directly or indirectly, in New York City real estate. On the other hand, the prices being realized for property, the greater part of which lies on streets graded, curbed and flagged, when reduced to an acreage basis, appears to me to be low in com¬ parison to the prices at which desirable Bronx acreage is being held. AUSTIN L. BABCOCK, Of .American Real Estate Co. Immediately Available for Development. The rapid buying at excellent prices at the Morris Park sale is very signifi¬ cant, because it shows the widespread interest and confidence in real estate in the Borough of The Bronx. This is more marked because at present real estate in New York generally is very (Uiiel. The purchases seem to be made r.ot by speculators but by buyers who intend to build homes. The efTect on the East Bronx of the influx of new home builders will revive activity in a section of the borough which his been dormant for many years. This interest is justified by the rapid transit and industrial railway plans which now are n.aturing for the locality. The build¬ ing of trunk line sewers makes these lots immediately available for development. CYRUS C. MILLER, Borough President of The Bronx. Breaks Down a Barrier. The sale of the Morris Park tract which is now going on has greater sig¬ nificance as to the future of The Bronx than many appreciate. The growth of The Bronx up to the time of the building of the subways was relatively slow. Its growth then took place in jumps, and big jumps at that. The increase in assessed values, 1899 to 1910, tracing to the operation of the Interborough in the lower Bronx, was 460 per cent. This phenomenal growth was necessarily confined in greater part to the district served by the rapid transit lines. The opening of the New York, West¬ chester & Boston Railway the early part of last summer made accessible a iiew section which had heretofore been with¬ out transit facilities. The development along its line had reached not much fur¬ ther north than Bear Swamp Road, and