Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 74, no. 1911: October 29, 1904

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October 29, 1904 RECORD AND GUIDE e> ■* ESTABLISHED ^JAWPH2l-lS6S. De/oteD p Rf\L Estate , BuiLDifjb Af'.cH'rrECTjRE ,Haii seHoid DEaffifntuC, BusijIess aiJdThemes Of GeKer^I IiJte^st. " PRICE PER YEAR IN ADyANCE SIX DOLLARS Published eVerg \Sattirdag \ Communications should ble addressed i SWEET, 14?16 Vesey\ Street, New YorK J. T. LINDSEY, Business Manager \ Telepbone, Cortlandt 3157 "Entered at the Post C e at Neio York, N./Y.. as second-class matter." Vol. LXXIV. October 29, 11904. rp HE sto^k market received some- very heavy shbL-iJi.' -thi" ^ week. There was the threatened war between Russia and Great Britain, the report o? the Steel corporation which was less favorable than was antlcfrated, the gold exports; and certain expressions of very authoritative opinion that the specu¬ lation wa5 over-reaching itself, f" certainly stood the shocks very well. Severe declines were fcllowed by rallies, and Friday was as urmal a good day. Whatever the weakness of the situ¬ ation frcm the point of view of the speculators for an ad¬ vance, the present level of prices is certainly very stubbornly maintaired. The men who are carrying stocks are not in an apprehensive or weak position. They still on the whole control the sitr.ation—whether by sufferance or substantia! strength re¬ mains to be seen. From the point of view of investment values it certa:nly looks as if the limit had been reached, and that any tighter ing of the money marlcet would cause a more consid¬ erable reaction. But it is possible tbat no tightening of tbe money market will take place this fall. At any rate it looks as if, il- case any slump comes along, it will come slowly rather tban unexpectedly and that speculators who are carrying stocks will bave time to get out. rp HE real estate business of the past week bas continued to be chiefly in vacant lots; and it has differed from tbe business of the week before more than anything else in tbe circumstance that the :operators htve been passing tbe lots on to builders. Tbe total sales bave been phenomenally large amounting to about ISO in Manhattan and 120 in the Bronx. Tbe Bronx total is particularly impressive, reaching as it does to a larger total than both IVIanbattan and tbe Bronx for the corresponding week last year. A total of over 840 lots bave been sold in tbat Borough ag.anst abjut 240 on Washington Heights and 89 in the Lenox Ave. section. It will be seen con¬ sequently that the tide of business north of the Harlem has been swelling to an extraordinary bulk. Another interesting fact of the weel^ has been the appearance of the Century Bealty Co. and the United States Bealty & Construction Company as buyers of a large block of Bronx property. It was inevitable, as tbe Record and Guide has pointed out severa'. times of late, tbat the large speculative companies would begin operations in unimproved lands along tbe Subway. Tbe activity and tbe profit lie in transactions of this kind. For the present they mnst forsake tbe region of sky-scrapers in the middle reaches of Manhattan and help along the buildmg up of the outer mar¬ gin of the city; and the wonderful thing about New York as a field for real estate and building operations is the great variety of the opportunities offered. Sometimes one kind of opportunity prevails and sometimes another; bnt there is almost always a decent chance for profitable business. Another noticeable tact is the extent to which fiats are being adopted as the form of improvement for Washington Heights. So far as we are aware none of the sales of the past few weeks have been made to builders who propose to put up private dwellings. Last spring when Mr. Cbas. T. Barney flrst announced that the Donnelly tract was on the market, he stated his intention of practically restricting tbe side streets to dwell¬ ings; but all these lots have now passed into the hands of apart¬ ment-house builders. Furthermore, ot the 300 or more sales consummated in Manhattan and tte Bronx only eighteen are private dwellings. Is Washington Heights to become a city of flats and tenements and little else? THE "Sun" has recently stated with great precision the dis¬ tinguishing characteristic of the current speculation in vacant land oa Washington Heights and in the Bronx. "No preceding lot speculation on a grand scale," It says, "has been so directly associated with immediate building enterprise or closely related to bnilding enterprise of a certain kind," This is an extremely important fact and must be kept" constantly in mind 'in estimating tbe results of the "boom." It is not a "boom" at all in the old sense of the word. This country and this city has passed through many periods of wild speculation in land and unwholesome inflation of land values. The wildest of these periods of local inflation oc urrcd early in tbe seventies when the prices of lots on Sth ave were raised to a level which was out of all proportions to their immediate value for im¬ provement; and which were only a little less than the level attained thirty years later in 1902. At the same time lots on Broadway, in the Dyckman tract were selling for about the same prices that they have b en recently bringing. Tbe pay¬ ing of these prices for property, which would not be reached for a generation in the natural grovr-th of the city was, of course, mere inflation and could be expl3,'ned only by a popular craze .lor real estate speculation. Since then there have been several "boom;':" on Washington Heights, all of which were fruitless, because tht," district was too inaccessible for immediate exploita¬ tion. Since tL'iose days, however, tbe whole business of deal¬ ing in vacant lotL- and selling them for improvement has be¬ come very much betM^r organized than it was. It has become the occupation of a gr'iysjp of professional operators, who in almost all the purchases they i-^iak? keep the possibility of early and profltable improvement in rcii:^ci. They do not buy vacant land witb tbe expectation of he A'- it indefinitely, but with the purpose of turning it over to a b^ '" " within a few months. Under such circumstances there is very littlt"' room for inflation because values are based upon tbe known yield .p^ the property when improved. It was the same way with ^^hc so-called "boom" of two years ago in higl.-priced real, estate' in Man¬ hattan. Business men who heard of the large increi.^'se in values argued by analogy that inflation was taking place, auT^^ expected that in a year or two the "boom" would be punctured and values would drop. But in this ease as in that of the vacant land, the prices were made for the most part by professional operators, who knew very well what they were about, and who did not pay more for a piece of pioperty than was warranted by the income which could be derived from it when properly improved. The existing market for real estate in this city ia for better or worse a professional juarket. Genera! investors do not like real estate as much as they used to, because the pro¬ fessional operators keep the proflts for themselves; but the lat¬ ter earn the proflts they make and they assuredl-y prevent any considerable "inflation" of reai estate values. or so , ^1 IT is doubtful whether the incorporation of a tunnel company by the Lackawanna Railroad foreshadows the construction ol still another connection underneath the river between New Jersey and Connecticut. The counsel for the company states tbat the tunnel will be built; but the project to build one may be simply a move in the flght between the railroads and the trolley tunnel company. As an outsider sees it the alternative either of constructing or of not constructing a tunnel seems to present grave diflculties for the railroad company. At present the Lackawanna controls an extremely lucrative traffic to the most populous New Jersey suburbs. This traflic is threatened in some measure by tbe Pennsylvania tunnel; but it is much more seriously threatened by the plans of the trolley company ^particularly if that company secures tremini both on Green¬ wich St. and Greeley Square. A ferry and train service such as tbe Lackawanna now has could not efEectively compete with express trains running into the heart of Manhattan. On the other hand to build into Manhattan would cost an amount of money which would hardly be v/arranted by the traffic of the company; and it would be many years before the travel under the river would justify any more tunnels than tbose already planned. The balancing of the argument indicates, however, that the Railroad Company will in tbe end be obliged to run its trains under the River and it is probable that some arrange¬ ment will be made with the Er'e Railroad which will distribute the expense between the two companies. ACCORDING to the Mayor's account, given at the dinner celebrating tbe opening of the Subway, the city is al¬ ready running uncomfortably close to the debt limit. The actual margin at tbe present time is, indeed,over$100,000,000; but 60 per cent, of this amount is already pledged for the bridges and other new construction now underway, and there remains only about 540,000,000 for such imperative improvements as the extension of the rapid transit system and an additional water supply. No wonder the Mayor and the Comptroller have united