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Real estate record and builders' guide: v. 27, no. 688: May 21, 1881

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Real Estate Record AND BUILDERS' GUIDE. Vol. XXVII. NEW YOEK, SATUEDAT, MAT 21, 1881 No. 688 Published Weekly by The Real Estate Record Association TERMS: ONE TEAK, in advance.....$6.00 Communications should be addressed to C. W. SWEET, 137 Broadway. J. T. LINDSEY, Business Manager. The changed condition of the times is shown by a leaf from the history of one of our leading law firms. This firm, which does a very large business, many years ago advised their customers to iiivest in mortgages on West Side unimproved prop¬ erty. Relatively large sums went through their hands into these West Side lots, and when the panic came their clients found themselves without an income, and with discredited mortgages on their hands, which they were forced to foreclose. The clients being rich men, they very generally bought in the mortgaged property, but the account was heavUy against them up to within a re¬ cent period. The remarkable fact now comes to light that eveiy one of the persons who foreclosed has made a handsome ad¬ vance upon his original investment. It is believed the average is as high as 25 per cent, profit. Of course aU of them have not yet sold, and those who hold on will probably double their money. But we have no doubt the history of this flrm is that of many others. The mortgages were given during and subsequent to the war and were based on paper values. Yet, notwithstanding that fact, every mortgagee who foreclosed, and had the grit to hold on to his property, made a very handsome percentage on the transaction. After all the secm-est invest¬ ment of money is in a mortgage on real es¬ tate in or near a growing city. As we have said, the property foreclosed was situated west of Eighth avenue, and between Seven¬ tieth and One Hundred and Tenth streets. And yet prices have hardly begun to advance in that region. A stranger, visiting New York for the first time, would be struck with the im¬ mense amount of buUding and repairing which is now being done. Not only are there thousands of buildings going up in the newer part of the city, but in every one of the old neighborhoods antiquated edifices are being replaced by new ones, while there is an unusual amount of repairing going on. This is true, not only of all the leading avenues, but also of the side streets, and is as true of the poorer as ,^of the richer parts of the city. There is an unusual demand for all classes of mechanics, masons, plas¬ terers, plumbers, carpenters and the like. All the fancy employments about houses, such as decorators, fresco painters and fancy fumitm-e men are unusually busy for this time of the year. In view of this ex¬ traordinary activity in building, and all that appertains thereto, it is remarkable how deserted the Eeal Estate Exchange appears to be. The conveyances keep up, as om- lists show, but the auction sales are neglected, and exceUent property is offered without bidders. There.must be a change forthe better before long. WILL THERE BE A SUMMER BOOM? Of course we mean in real estate. Specu¬ lators were certainly disappointed in there being no advance in prices during March, April and May of this year. Realty of all kinds, while in a wholesome condition, has shown no evidence of any excitement. True, the Record for the last • four weeks shows by its list of conveyances that the number of transactions has been much larger than usual at this time of the year. Another reassuring fact is that the transac¬ tions were not forced. They were the free purchases of investors from people who were not compeUed to sell. But the prices of this spring show no advance over those of last fall, while there has been a marked de¬ cline from the quotations in the winter and spring of 1880. Not only improved lots, but house property has been selling recently at veiy moderate figures. May not this coming summer show a de¬ cided change for the better in prices and the number of transactions ? Perhaps. Dealers do not look for anything of the kind, and there wUl be a general surprise should outsiders come in the real estate mar¬ ket and bid property up. Yet stranger things have happened. We hve in stirring times, when specula¬ tion is rampant and speculative investors are seeking new openings for their surplus funds. Within six months of this year nearly .$700,000,000 of 5 and 6 per cent, government bonds wiU have been refunded at 'd)4 per cent., but probably $90,000,000 to $100,000,000 wiU be disbursed to those who prefer to use their money in other ways. This Byi per cent represents the rate of in¬ terest people are willing to take for the best appreciated government obligations. It fol¬ lows that any railway security which is sure for 8 per cent,, ought to sell for nearly 200, and that a certain 6 per cent, would be reason¬ ably cheap at 140, Hence, on the street it is confidently predicted that New York Cen¬ tral will see 175 this summer, and Lake Shore 150, It is easy for the reader to look over the stock list and pick out the bonds and stocks which pay 5 per cent, and over. He can add a third to the present figures, and the price wiU not seem extravagant before next August. This forecast is predicted upon the present state of things continuing. We may have war. Jay Gould may die. Washington may share the fate of Lisbon, and be en¬ gulfed in an earthquake. But, unless some such monstrous event should occur the com¬ ing summer wfil see the highest prices ever known on^our_Stock Exchange, If this is so, a movement in real estate wiU soon be in order. House property will rise to figures that wUl not pay more than five per cent. There are a class of investors who cannot live on the proceeds of a three and one-half per cent, government bond, and it is they who will bid up the price of im¬ proved realty. Productive farms wiU also be in demand, whUe well located, unim¬ proved real estate ought also to be much more firmly held. Theu, there may be a surprise in store for New York. Cyrus W, Field is back. Sup¬ pose he should get up a combination be¬ tween the elevated road people and the out- of-town raUroad magnates, with a view to making the World's Fah- a gi-eat success. He is a man of ambition, energy and pluck, and it would be a feather in his cap if he should succeed where Ulysses S. Grant has failed. But the certainty of a; World's Fair anywhere on this island, would add a value of twenty-five per cent, to all up-town prop¬ erty. It will not be long before Mr. Field's decision is made known, and should the World's Fair project go through, nothing can prevent a very decided movement in real estate during the coming summer. But whether there is or not, anyone who has spare money cannot do better than iuvest in property on this island. OUR ELEVATED ROADS. Matters are reaching a crisis in our eleva¬ ted road system. From the legal proceed¬ ings and the statement made by oflicers, there is every reason to believe that the Man¬ hattan will default on the payment of the leases next July, in which case a receiver will probably be appointed. This, however, would not necessarily break up the Manhat¬ tan lease, for the defaulting company has ninety days grace in which to make good its contracts, and undoubtedly some provi¬ sion will be made to keep up the present or¬ ganization. But to do this, two things must be done. The Metropolitan and Elevated companies must consent to a lower rate of interest than 10 per cent., and the city must reduce its extravagant taxation from one- half to two-thirds of the rate at present asked. WhUe it is true the manipulation of the stocks of the elevated companies has been discreditable, stiU the elevated roads have treated the traveling and busiuess public better, as it turns out, than the latter de¬ served. Their charter gives them the right to charge 15 cents above Fifty-ninth street! they have never asked more than 10 cents- The company has voluntarily increased the 5 cent hours. The roads themselves fumish the cheapest, swiftest and most luxurious system of inter-mural travel of any in the world. In return, the roads have been de¬ nounced by the press, and the public is unan¬ imous in demanding that they should be taxed out of existence. Indeed the taxation is monstrous, and unless partially or entirely remitted, wiU put a stop to the further ex¬ tension of the elevated system in New York- As the press and the public have made up their minds not to be satisfied with the ele¬ vated roads, the latter must look out for themselves, and if a receiver is appointed, he must run the trains in the interest, not of