The San Francisco call., 1909-10-02
SAFE TO INVEST
AT GOING PRICES
Predicted That Many Big Trans
actions Will Take Place in
Next Six Months
No Mistake Can Be Made in
Buying as the Market
Is Today
By A. S. BALDWIN

From a brokers' point OF view there
is no Disgusting the fact that the real
estate market is not in a state OF
exhilaration. Large deals are few and
far between. There is. however. no
reason why we should rack our brains
in search for the cause. We must
not expect TO find a community OF
plethoric purses after the destruction
OF several hundred million dollars OF
its assets. We have been expecting too
much. Property values in San Fran
cisco were never fixed by outsiders.
Local capital in the past has shown
a preference for real estate as an in
vestment over securities and the large
amount OF local capital which was
available prior TO April. 1906. was thu
means OF stimulating the market and
sustaining values.
The largest operators were what we
might call marginal buyers. They
bought heavily and borrowed heavily.
The result was inevitable after the
ashes cooled. But they were not the
only cripples. Nearly every property
owner, millionaire or otherwise. was
compelled TO go into debt to rehabiIi-
tate properties. Then came the panic
OF two years ago. II there ever was a
community in a sadder plight than
this in October. 1907. doubt it. We
were sorely in need of money for
building purposes and COUNT get 1t.
apparently. anywhere The high inter
est rates, however, lursd a good many
millions from it's hiding place. Money
came from the most unexpected sources.
In the main it was local capital. and
the lenders were, generally speaking.
the ones who prefer bonds and like
securities to real estate.
Mortgages drawing interest at rates
ranging from 10 per cent clear
Of taxes had the call. and 1t was but
natural that investors should prefer
them TO the purchase of real estate.
especially when there was doubt as
TO what property would be worth again
in the burned district. II there had
been no stringency in the money mar
ket two years ago outside capital
might have found it's way to San Fran
cisco and there might have been more
trading in real estate than there has
been during the last two years. There
also might have been more building
I do not regard. however, the failure
to bring additional capital here mis-
fortune by any means On the contrary
I
have been a calamity. as we would
have undoubtedly overbuilt In every
direction
notwithstanding the fact that ths
real estate market is inactive I con-
slider the future very encouraging.
Property values have reached a sans
level and I believe within the next six
months many important transactions
will be consummated. The large
amount OF money which was placed on
mortgage in 1907 will be turned back
and in many cases to local lenders 3
and it will be replaced by savings
banks here and also other financial
institutions outside OF the state. who
are now Offering money here on a 5
per cent basis. Many local capitalists
will find themselves with a large
amount of money on hand. and with
property values on an attractive basis
sales will be effected.
Generally speaking buyers do not
like to purchase on what they consider
declining market This Is perhaps
one OF the reasons that some are hssi-
tating now. II they are I believe they
will regret II. Real estate in the
best business sections of the city can
be purchased now at prices ranging
from 30 TO so per cent less than was
asked prior TO April, 1906. Several
holdings l know OF in Market street
can be had on a basis which will yield
return OF s per cent net interest on
the total investment and where the
improvements represent only about 10
per cent of the value of the land.
Opportunities to purchase on a SINH
lar basis elsewhere exist. Surely no
mistake can be made in buying real
estate under such circumstances and
conditions. Buyers will soon realize
this and a strong market will result.
-o