Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-15
REAL ESTATE GOSSIP
Change in Conditions Favor
able to Building Market.
{ DECLINE IN INTEREST RATE
Current Cost of Ground in the Resi-
dence Sections.
PRICES FOR ELIGIBLE SITES
Outlook for the Coming Season I'M
proved by Recent Happenings
in Local Circles.
PRICES FOR ELIGIBLE SITES

The increase in the amount of : per
cent money for loans on real estate is
Brought out in part by the record of deeds
OF trust as. recorded daily in the Office
of the recorder of deeds. AS rule the
rate is stated in each deed OF trust. and
1t II noticeable within the past week or
SO that the figure six, which had been
used right along. Is now frequently drop
ped out and the figure Ave employed in its
stead
Large loans have been recorded recent
~ az having been made at 3 per cent, and
while per cent money remains yet it
liz evident that 1t Is gradually being re-
placed by that at a lower rate. This is
recognized by those who deal largely in
loans on realty as the situation at the
present time. and they don't look forward
to the retention of the higher figure for a
great while longer. 1t has only been the
ruling rate for the past month or so,
or since conditions became such that it
Was difficult to get money on any terms.
Security Is Good.
In other words. the more costly money
was only an emergency measure in this
city. for 1t has long been the case here
that real estate values are on such a
substantial basis that loans with such Sc
cu-ity carry only the lowest rates rec
ogrized As current at the best centers
1t Is true that the best Washington real
estate IL not regarded as on a parity
with the best New York real estate. as de-
termined by the rate for which loans can
be secured
AS every one knows. the values of realty
in New York. or at least in the sections
Of the lower portion o. the city, are with
out an equal in any city in the world. and
40 1t Is not surprising that In good times
realty loans there have been made at as
low rate as ? per cent. Such an in
terest charge is exceptional in this
country or anywhere else and is by no
means common in New York. The
variation in the interest rate is largely
determined by the value of the security
offered SO that 1t will be found to furnish
quite an accurate measure of the standing
OF real estate as an investment.
The Gauge Of Values.
As the qualities of safety and Sc
curity increase and become more general
ly known the rate of interest on loans
gradually diminishes. and In the case of
settled and important centers 1t reaches
the lowest level known. in the civilized
world. 1t may, therefore. be regarded as
an !ndieatlon OF the growing value as well
as the growing appreciation of the value
OF realty In this city that recent years
have Witnessed steady decline in tho
cost of such loans.
Such transactions have been made at 4
per cent, and in some instances still
lower figure has appeared. In the case
Of the recent rise in the rate. il Is recog-
nized that was not due to any change in
the estimate of the security g realty for
loans. but rather to a passing condition
u the money market.
Eject on Building.
The lowering of the cost of loans on
real estate has an important bearing on
the outlook for the coming season, both
frem the standpoint OF the builder and
f-om that OF the general operator The
former will find 1t easier to figure a profit
In building II he is able to get the neces-
sary loans at moderate interest rate
while the latter will note an increase in
The buyers under the inducement of mod
crate charges.
II may not seem a great matter, the
difference between and per cent n
year for money. and IL is in fact. only one
dollar more on the hundred and ten on
The thousand. There is another way of
looking at such an additional cost that
puts Ii in quite q different light The bulk
Of the selling business here is in houses
and a large proportion Of the homebuyers
do not have the money to pay for their
BONES outright. In nearly every case Ii is
q matter Of small payments installments
throughout the year. so that they can be
met with the greatest ease to the make RS
OF the notes secured on the houses
which they propose to make their homes.
Prohibition in Certain Cases.
Now. in the case of house where the
deferred payments amount to $1,000 a
change In the rate of interest from to 6
per cent would mean $50 a year, or IS
per month. Such an addition to the
monthly cost Of carrying the house would
be In q large number OF cases prohibitive.
30 that il the builder could figure out that
he could stand such a charge for money
he might find that he would have to face
4 diminishing market.
The fact Is, with values I'm the real es-
tate market here. substantial and well
grounded as they are. the natural tend
ency IL toward the lowest interest rates
in the case of loans having such security
There in no better evidence than this OF
the established and assured character OF
this city as il is feature that Is TO be
found only in centers of the first grader
Current Per Foot Values.
A transaction that was recently record
ed. and which is of interest owing to thu