The sun., 1909-05-16
THE REAL ESTATE MARKET
SPECULATION ENCOURAGED BY
low MORTGAGE RATES.
Building Is Unusually Active and the
supply OF New Housing Is Affecting
Rents. Which Taxpayers Are Trying
TO OFFSET Through the CIT! Budget.

BulldlnB Is unusually Active ana the
supply OF New Housing Is Affecting
Rents. Which Taxpayers Are Trying
10 Offset Through the CIT. Budget.
Speculative enterprise induced by cheap
money continued last week to be the
leading characteristic of the real estate
market. At no time since the mort ga ge
tax was abolished has capital been so
plentiful as it is now. The prevailing
rate OF interest on permanent loans
in Manhattan last week was y! per cent.
In the absence of an annual mortgage
tax it is altogether likely that a per
cent. rate will become general before
long. Lenders are therefore making
special efforts to put out capital at the
present rate by Offering building loans
at tho usual rate for such loans. namely
8 per cent, and guaranteeing to convert
these into permanent" loans at ~ per
osnt. when the buildings are completed.
The chance of obtaining such a guar
antee Is not, as a rule. open TO builders.
The Offer is particularly attractive be-
cause II assures a definite financial sup
port for period Of four to six years, a
period quite long enough TO hold out
promise OF being able to sell at a profit.
Builders are consequently showing a
remarkably bold and aggressive spirit
in the matter of new constructions. Sites
are being bought for improvement on
large scale. notably in the warehouse
district on the lower West Side. in the
midtown wholesale and retail section.
in the uptown apartment house neighbor-
hood and in The Bronx,
Afurther induoement to build is found
In the prospect Of rise in structural
materials. Brick has already gone up
considerably, but is still cheap compared
With the prices that prevailed three years
ago. Builders figure out that building
erected now should advance in value
during the next few years through mere
increase in the cost Of structural ma
teTials. Ans ured OF mortgage loans ex-
tending over a long period and looking
forward to substantial advance in the
cost Of construction. builders have every
possible inducement to take up land for
Improvement.
Meanwhile it is reoog ognized that rents
are being affected by the great production
downward tendency ia Offset by lower |
taxes freehold values are likely to suffer. !
Real estate associations are therefore !
uniting In numbers in support Of the /
campaign for an economical and care /
fully considered city budget Through |
the initiative of the Bureau OF Municipal !
HReiSr the campaign this year is already .
wel under way, so that ample time will |
be given for public discussion Of the |
main Items in the budget Furthermore,
the cooperation now for the first time !
undertaken betweeri real estate organiza-
fions and philanthropc associations ,
promises to make the discussion Of genuine ,
constructive value to the city officials /
charged with appropriating the cty's /
tax levy.
q response TO a letter from DR.. James
A. Miller, acting Tor a conference OF civic /
and charitable agencies, the Board Of |
EimaMss re and APPorth,onbmsnt bos has already
wears budget. The various taxpaying
organizations are informed nearly six
M nofsths In advance that on October 20 they .
viii have q chance TO discuss all Of the |
budgss proposals for 1910. Moreover,