Los Angeles daily herald., 1889-06-01
SAN FRANCIsCO'S BOOM.

tntlatfon. Crasn. =,
EDITORS HERALD-The largest and
most remarkable speculation that the
annals of the trade record, is now having
full swing in San Francisco ana lts
suburban towns.
A few lines in regard to it may be OF
interest to the people of Southern Cali
fornia. who are generally credited with
distinguished success as "boomers.
The San Francisco press has Tor some
four or five years encouraged the idea
that a large immigration from the East
was about setting towards San Francisco
and the country round about 1t. This
immigration has never materlalized, and
the growth of the Bay City and its
tributary country has for ten years been
little, if any more than the natural In
crease of healthy population.
But the persistent daily predictions OF
a vast immi yration have produced upon
property and property-holders the most
Surprising results.
There has been no increase of business.
In most parts OF the city a steady fall in
rent has continued for ten years or
more. This latter feature seems
peculiar to San Francisco. On Jackson
and Pacific streets, buildings that rented
for from $500 to $500 per month are now
renting for $40 and $50 per month. On
Market and south of Market in the very
heart of the city, this decline in rents
has taken place and is continuing.
The Nucleus Block, corner of Third
and Market, rents for 3715 per cent. less
to-day than it did ten years ago. The
same decline has taken place on Pine,
California, Battery, Sansome and Third
streets. But even at the reduced prices
tenants are not plentiful. Colonel Eyre
has building on the best portion Of
Battery street valued at $l25,00O,
Which has been vacants eighteen
months. The Lachmsn Block, the
finest wholesale block on Market
street has remained idle for one year.
Everywhere in the city landlords will
tell you that the first year their buildings
were built they rented better than ever
after. Yet in the face of reduced in
come, speculation has steadily advanced
prices, the advance in the Market street
extension, Valencia street, outer Mission
street, being in many instances 500 per
cent. within the past four years. Upon
the inside the advance has been enor.
NOUS. Rents are no longer any criterion
of value. Every one talks of a continued
advance in prices and income is lost
sight of entirely.
The best wholesale lots on Market
street. between the Palace Hotel and the
Ferries, are held at $4,000 per front foot,
and when improved, pay about three or
four per cent. per annum. But this rent
is considered of small account by owners,
as the advance in price is considered the
profitable feature. At least it has been
in the past, and is expected to be 30 in
the future.
The best retail lots are from the Palace
Hotel to the Baldwin, and are held at
from 81 900 to So 900 per foot front.
The report OF the Northwestern Real
Estate Agents Association, held in Chi
cago last October, and published in the
st. Paul Pioneer Press of January l, 1889,
gives the price of the best wholesale lots
in Chicago at from $4,000 to $2,500 per
front foot, or only about half the price OF
similar property in San Francisco. The
retail lots are valued in Chicago at from
Sc. 900 to So 900 per front foot, as against
$4 900 to sc, 900 in San Francisco. Now,
Chicago has nearly 100000 population
and San Francisco 1926 900. The one is
growing fast, the other slow. Taking
population, growth and amount of busi-
ness into consideration, Chicago property
should be three times as high as San
Francisco, instead of little more than
one-half as high.
But ridiculously inflated as is inside
property, outside prices are even more
absurd.
Besides the tens of thousands of un.
improved lots within the corporation, al
every station between San Francisco and
San Jose, from 900 to 5000 and 5000
acres have been laid off in lots of 25x125
feet, averaging ten to the acre, or in
other words, 800, 900 lots lots for suburban
residence are offared for sale upon one
line of railroad. If to these we add the
suburban residence lots in other direc-
tions, we may safely say 100000 suburban
residence lots are offered on the San
Francisco market.
In addition to these lots and contiguous
to them, not less than 800, 900 acres OF
common farm land, used for raising hay
and barley and renting for from So to S.
Der acre, is held on speculation (ready
for lot subdivision) at from $400 to 81 500
per acre.
Upon all these hundreds of thousands
of suburban lots not twenty houses are
being erected. In the city proper some
building is in progress, but mostly cheap
frame dwellings.
More brick buildings are put up in
Denver in one year than in San Fran
cisco in ten years.
Yet the enormous prices OF property
are maintained, and the general opinion
of real estate experts is that no property
in the city at present prices can be inn
proved to pay. Hence, high as is the
price, if any money is made it must be
made by speculation, by a still higher
rise.
But this continual rise, that has now
carried property to nearly double the
price in cities of three times the popula-
ton, cannot much longer be maintained
Nearly every one thinks prices are high
enough, and top figures are hard to get
The whole fabric is becoming top heavy.
AS soon as people realize that top prices
have been reached, and that the prop
erty must pay a rental, and not in a
monthly rise of the price, a realizing
sense of the situation will force such a
drop in prices as was only equalled by
the Comstock stock speculation. One
hundred and fifty million dollars of
imaginary value will be squeezed out of
the prices Of land on this peninsula.
Our highest priced wholesale lots will re-
cede in price from 81 900 per front foot
to $1,000; our best retail lots, from
$5 900 per foot to $2,500 our suburban
lots will become farm lands at 500 to