Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 97, no. 2494: Articles]: January 1, 1916

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|N REAL ESTATE BUILDERS Af>D NEW YORK, JANUARY 1, 1916 piiaiiiiiini ■■■■■■■■■■^^^^^^ REALTY REVIEW AND OUTLOOK FOR 1916 Market is on the Men(i, Activity ShouM Increase and Prices Enhance—Present-day Evils Must Be Curbed ■■■■■■IlillglilliBilill! ■i [■■■■■■■■tllMIW THE year 1915 touched the lowest point in the real estate market that has been recorded in inaiiy years. Prob¬ ably there is no better way to estimate this falling off than by the steady, con¬ sistent decline in the number of record¬ ed instruments, including conveyances, mortgages, assignments and leases. What has been the cause of the inac¬ tivity, and will the decline continue, or has the turning point come at last? The inactivity can be ascribed to many causes, prominent among which might be named timidity on the part of investors and speculators. What Is tiie Reason? What has been the reason for this timidity? Has it been lack of confidence in the stability of real estate as an in¬ vestment, or has the slump been caused by a fee!in,g that demand for well located, modernly constructed houses has pasted? These questions can be an¬ swered, as a whole, in the negative. The principal cause for the reluctance on the part of the investing public to enter the real estate field has been the fact that there is no assurance where inspec¬ tions and regulations will end, or what cost will be imposed upon the owner by the city for maintaining and running the city government. There is little doubt in the minds of the average citizen but that the mu¬ nicipal expenses could be materially re¬ duced, though should he be asked how. it is doubtful that a logical an¬ swer would be forthcoming. Neverthe¬ less, this has been the reason for the elimination of a large percentage of prospective purchasers, those who have the means but still are unwilling to in¬ vest in realty. The same man will assert that, left alone, real estate is the best and safest sort of investment, one which will re¬ ward the buyer with a handsome return on his investment—but it must be un¬ molested and the buyer assured that nothing extraordinary will happen to up¬ set his plans. Psychology a Factor. Psychology also plays an important role in the real estate field. Up to the last fe-w months it was fashionable to tell your friends and business associates how poor business is and how seriously the war had affected your livelihood. Acom- plete revolution of feeling, however, has come about during the last few months, and now almost every one is a "booster" and ready to acknowledge that business is on the mend. This, in itself, will do much toward righting conditions. But there are more tangible reasons than this for knowing that tlie real es¬ tate market is on the upward path. Building throughout the country has be¬ come enlivened, and this always has a stimulating effect upon the local real estate market. When property owners see others improve their holdings, it is only natural for them to look around and discover tlie reason, to find out whether a real demand exists, and if so how can their own holdings be improved, so as to meet the situation, thereby increasing the net return. History has proved that real estate in New York City follows Wall Street. When there is a slump in prices among securities, realty feels the effect some¬ what later, and the reverse is also true, for following a Wall Street uplift a rise in realty values follows. Wall Street has had a boom of no mean proportions during the past few months. It is fair to assume that realty will feel the re¬ bound, unless all previous signs fail. Auction Market Situation. Taken in its entirety, the auction mar¬ ket did not come up to expectations. Many of the properties went back into the hands of parties in interest, at prices less than the known incumbrances. On another page in this issue is printed a table of all the properties offered to the hi.ghest bidder which brought more than $10p,000. These figures show an inter¬ esting condition. The cheaper parcels brought somewliat more lively bidding. The vacant lot offerings found buyers and the properties have been well dis¬ tributed. The settling of the rapid transit situa¬ tion, the large amount of work actually completed has done much for realty in the sections near and adjacent to the routes. This applies to the properties in the outlying sections as well as in Man¬ hattan. Mortgage money has become easier during the last few months, and the loan¬ ing institutions are more ready to loan upon good properties or building opera- tio.is than for some time past. This is remarkable in view of the tremendous sums of money required to finance the European war and the drains that are made upon the citizens of those countries who reside in the United States. The question of amortized mortgages is now prominently before the loaning interests and the result will have.great bearing on the real estate market. Much interest was manifested in legis¬ lation in Albany at the last session by the real estate organizations. Never were they so faithfully represented at the capital. Committees were posted there all through the session to watch out against bills inimical to realty, and to urge the passage of those which would relieve it from unjust burdens. A num¬ ber of hearings drew large delegations from the allied associations in this city. Labor Law Influences. Local hearings on a proposed revision of the Labor Law had held out the hope of a genuine modification of some of the drastic laws therein contained. A bill was prepared by the Conference Commit¬ tee of Real Estate and Allied Organiza¬ tions and introduced by Senator" Lock- w'Ood_ and Assemblyman Ellenbogen to simplify building inspection in thTs city. It passed both houses by large majori¬ ties, \vas the subject of two hearings at the City Hall (one by a joint Legisla¬ tive Committee and one by the Mayor) and at the last was vetoed by the Mayor \vhen there was insufficient time to pass it over his veto. A bill embodying a revised Labor Law, prepared by the Joint Legislative Com¬ mittee of which Senator Wagner was chairman, and designed to add more power to the Industrial Board, aroused great opposition and failed of passage. Instead, a bill was enacted abolishing.the Industrial Board, and the office of Com¬ missioner of Labor, consolidating the board with the Compensation Commis¬ sion, and directing the appointment of five new industrial commissioners, from which Realty hopes for better things than came from the old board. A bill was passed by the Le ' '"re providing for an investigatior. of the State system of taxation (which the Mills committee is carrying forward), and an¬ other bill was passed lor an inve tigation of the fiscal affairs of New Y jrk City (which the Brown committee is : -jW pro¬ ceeding with), and from both 'if which committees the taxpayers hope for meas¬ ures of relief. Important Legislation. The most important legislation which may be classed as revenue legislation af- fecting_ the city of New York was con¬ tained in six bills, now six separate chap¬ ters of the Laws of 1915, relating to the condemnation of real property for pub¬ lic use. Another bill which became a law greatly enlarged the powers and possible usefulness of the State Tax Commission¬ ers. An injury which more than coun¬ teracted all the good to realty from the Legislature was contained in the pas¬ sage of the bill levying a direct State tax of $19,000,000. For the coming session the real estate and commercial organizations of the city are preparing a bill designed to meet the approval of the Mayor and Board of Estimate and having for its object the relief of property from the annoyance and expense of over-inspection. Relief meas¬ ures are also expected from the Legisla¬ tive committees which have been investi¬ gating the State tax system and New York City's fiscal affairs. Builders a Factor. Speculative builders have been the principal purchasers of large corner plots, the Park avenue and West End avenue sections being prominent as far as apartment house construction is con¬ cerned. The district west of Broadway, between Herald and Times Squares came in for considerable prominence as far as mercantile construction was concerned. In the Flatbush section of Brooklyn a number of high class apartment houses have been erected in the side streets, while some construction of similar char¬ acter has been witnessed on a few of the main arteries. On the west side of Prospect Park several elevator apart¬ ment houses have been built or projected. In Bay Ridge the two-fam.ily and semi-detached dwelling has given away to the four-story brick tenement. On the avenues stores are installed, while in the side streets this feature is eliminated. The major portion of the improvements has been along the route of the new sub¬ way, though at the present time there is a distinct trend beyond the present lines, discounting future rapid transit.