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Real estate record and builders' guide: v. 79, no. 2048: June 15, 1907

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June 15, 1907. RECORD AND GUIDE 1151 0^61* TO Rea.!. Estate.BinLDijfc AftpKiTEeTu;\E,Houss{(HiDEi3ai«K»f, PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Published eVery Saturday . Communicatlona should be addreased to C. W, SWEET Madison Square: 1 1-15 East 24th Street Toloplioiie, 4430 Madiaon Square "Entered al tlie Post O.ffice at J^^eio Yorl; JV. T„ as secoitd-class maltei:" Copyrighted, 1907, by The Record & Guide Co. Vol. LXXIX, JUNE 15, 1907, No. 2018. INDEX TO DEPARTMENTS. Avertising Section. Page. Page. Cement .......................vii Lumber'.......................xx Consulting Engineers ..........vi Machinery..................viii Clay Products ................xviii Metal Worlt ...................xv Contractors and Builders.......iv Quick Jot) Directory............xx Electrical Interests............ix Real Estate..................xl Fireprooflng...................ii Roofers & Roofiug Materials.,xix Granite .....................xvi Slone.. .♦...................xvi Iron and Steel.................x Wood Products ................xx THIS has .been another week of dulness and irregu¬ larity in the stock market, and the Indications are that such eonditions will prevail throughout the summer. The price movements were in narrow limits, and when a little activity developed prices at the end of a session were about where they were at the beginning. The Govern¬ ment's suit against the coal roads, talk about war with Japan, Treasury calls for many millions, and rumors of business firms in distress, had practically no effect on the market. Wall Street is sensitive, but of late years it is more and more difficult to foretell with any degree of certainty the effect bad news or good news wiil have on the market. Those with years of experience on the Street are frequently as much at sea as the mere neophyte in spec¬ ulation. This condition of affairs arises because there are now three or more rival camps controlling great railroad, banking and industrial interests, aud wliile bad or good times are reflected in prices of stocks, the mere surface indications in the way of fluctuations have no significance. Thus, the failure of a large corporation engaged in the man¬ ufacture of steel scarcely caused a ripple iu ciuotations generally any more than did the favorable news of the veto by Governor Hughes of the two-cent fare bill applicable to steam railroads in this State. .That there is not much fear of there being very poor crops—or as some would have it no crops at al]—is shown by the violent break of wheat in Chicago. When holders wished to secure their paper profits, wheat declined three cents a bushel without a, rally. The professionals are reported to be out of the mar¬ ket and are preparing Eor a new movement, but be this as it may, one thing is very evident. Unseasonable weatlier such as we are having tliis summer is not going to send the country into bankruptcy; uncertain conditions of tiie money market, gloomy outlook as to crops, aud the feel¬ ing of unrest in industrial and commercial centres, to the contrary notwithstanding. Money rates have stiffened, as we predicted, and a rate higher than three per cent, may not be far off, but there sliould be no cause for anxiety on this account for real estate and buikling interests for the expected summer dulness still prevails. AMONG the other events of the past week has been the failure of a builder, who had erected a good many houses in the Washiugton Heights district; but the news need not disturb anybody not immediately interested in Mr. Arnstein. The wonder is that there have not been more cases of distress among the builders who a year or more ago were erecting so many fiats in that region. They ran into a situation which is about as bad as that which can face any group of builders. They were obliged, that is, to face a stringent money market, which prevented them from securing good permanent loans, a declining demand for apartments and a consequently increasing difficulty in sell¬ ing out. But the consequent distress has not been any¬ thing like so great as it was during certain analogous periods of development on the West-Side and in Harlem, because the title companies are much more powerful than they were ten years ago, and their influence has been ex¬ erted in favor of conservatism. It is not so easy as it used to be for a builder without any mouey at all to obtain enough credit to start a considerable building operation, and while many operations are started under such condi¬ tions they are fewer than they once were. The consequence is that' when conditions are unfavorable, a smaller propor¬ tion of builders are closed out. Moreover, there is, uuder such circumstances, less general demoralization. A re¬ munerative level of rents is more likely to be maintained, and the conservative builders are not pulled down with their more speculative neighbors. It is probable tbat next spring will disclose a much more favorable condition foi; building on Washiugton Heights than has recently beeu the case. During the past year the over-production of living accommodations, at least in Manhattan and the Bronx, has ceased, and in a short time vacancies will be much less numerous. It is improbable that even then building will obtain the proportions that it did in 1905, because it looks as if money would not be easily available for such purposes even by next spring. But there will be a gradual recov¬ ery. Every newly settled part of the city has to pass through these vicissitudes. They suffer more from unfav¬ orable conditions than do the older sections, just as they beneflt more from favorable conditions. Wasiiington Heights will be lucky in case it does not at some future period in the eourse of its upbuilding encounter real estate and building conditions no worse than they are at present. General Business Prospects and the Real Estate Market. vT-sHE general business outlook for the coming year is man- J. ifestly clouded with a good deal of uncertainty. The great majority of manufacturers and merchants are still .reaping the benefit of a large volume of trade; but they are scrutinizing the future much more carefully than they were a year ago, and they are much less willing to embark on any plans of business expansion that will seriously in¬ crease their responsibilities. They are unwilling to expand, not only because of the tightness of money, which will not be permanently loosened up for some time, but because they feel really uncertain in respect to the future market for 'their product. They are obliged to consider the possibility of a diminished rather than an increased demand, and they are obliged_ to ask themselves what their own condition would'be in the event of such a diminished demaud. This state of mind will undoubtedly have an important effect on the volume of business transactions during the coming.year. It is not possible that business will increase during 1905 as it has during the past four years, and the important question is whether such a failure to expand will run over into a year of business depression. If so, it will undoubt¬ edly have a serious effect upon the local real estate* market, because at the present time the most important single cause of real estate activity in Manhattan is the prosperity of general business. The demaud for real estate in the whole central part of that borough is profoundly stimulated by the constantly increasing need of more space by retail and wholesale business and by the manufacturiug industries carried on in those vicinities. So far, however, as existing indications go, it looks as it general business during the coming year would be char¬ acterized rather by a slower rate of increase than by the appearance of hard times. The business situation has as¬ suredly stood the collapse of speculation in the stock mar¬ ltet much better than it did during the summer and fall of 1903'. During the past winter and spring the prices of se¬ curities diminished in much the same proportion as they did in 190?.. Good railroad stocks are, on the whole, cheaper now than they were even in that year, and their cheapness has been brought about by analogous conditions. In both instances the business prosperity of the country and the de¬ mand for large supplies of money, resulting from this pros¬ perity, interfered with a rise In the price of seciirities pro¬ portionate to their increase in actual value. A group of speculators who had bought large amounts of securities in anticipation of this rise in values were in both cases caught out, and were obliged to liquidate, with a result disastrous to themselves' and harmful to a large number of timid in¬ vestors. It should be added, however, that the collapse of prices in Wall Street has so far had a much smaller effect on general business than in 1903. In that year the indus¬ trial stocks suffered as severely as did the railroad stocks, if not more so, whereas during the current year the Indus-