The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1890-09-25
THE GROWTH Or CITIES.

Referring TO a recent article in The CALL
on the growth Of The cities in the new State
of Washington, a correspondent draws our
attention to the fact that city lots III Seattle
and Tacoma are selling at $1,000 a front foot
on streets which are not yet graded or sew
cred, and that lots in the outskirts Of those
cities, actually Fin the bush" command from
500 to 5000 a lot. There is DO hing surpris-
ing in this. We are a S. ecuIa'IYe and a
saDguine people. We always believe that
cur particular goose is going 10 turn cut
swan. We have way of discouning the
future which is very seductive to the hopeful
mind: as builders of castlts in Spain We
have no equals il the world. That our hopes
I should sometimes outrun Our judgment is
no matter Of wonder.
1t is quite within the range of possibility
that lots or the main streets of the two grow
ing cities OF West Washington should some
day come TO be worth legitimately $1,000
front foot. Lots on California and Mont
gomery streets are worth more than that
and yet at the time James Lick picked up
the properties for which his heirs are now
contendiDg they were not worth much more
Than $500 lot, and it was an open problem
whether they would ever increase much in
value. As general rule, real estate in cities
which have future is good property to hold.
Some Of the most substantial fortunes of the
day have been acquired by its purchase.
But its advance in price is rot steady and
gradual 1t moves by fits and jerks. A day
comes when a large number of persons
simu ltaneously realize its coming value, and
everybody buys for fear Ct being left. This
leads to boom. The boom is followed by
a reaction, in which everybody is a seller
and nobody buyer. Then, under pressure
of forced sales, prices lecede as rapidly as
they had risen, and the fortunes which real
estate holders had seen in their visions van
ish into air.
The only safe rule for real estate operators
to follow is to disregard speculative values
End 10 buy nothing which will not yield
n fair rate of interest on its cost. Given
"A city which is reasonably certain not to peter
out; as many Eastern cities have done, like
wise some of our Sierra towns, it is safe to
pay for lots in central parts of that city a
sum uIon which the average net rental of
buildings erected thereon will constitute fair
interest. Such purchases are made at bed
rock. Under the pressure Of speculation the
lots may advance or recede in market value,
but they will not fall, except for brief periods
Of time and in moments OF extreme strin-
geney, below their original cost.
On the other hand purchases of city prop
erty made upon the notion that the city is
going to grow at an unexampled rate, and
that country town is about to swell to the
proportions of metropolis, are open to the
objection that if any setback occurs the mar
gin for shrinkage is equal to the previous
advance. Such a shIinkage or anything like
it would be apt to swamp an owner who was
In debt. Noone unless gifted with preterna-
tural foresight, can cast the horoscope Of a
new CITY. There are men now living who
bought. not without hesitation, LAID now In
closed in the city of San Francisco at S25
and $50 an acre, and who could sell it to-day
for $500 to $1,000 a lot. But on the other