Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-08-25
ALBERT M. GREENFIELD
On the Realty Situation

DHILADELPHIA real estate prices and
l. values are tending toward a new nor
nal, according to Albert NJ. Greenfield: a
prominent real estate man of this city. This
means. said Mr.. Greenfield. that the values
and rentals of dwelling houses have come
to or are near permanent basis that will
mark something more than a half way point
between pre- war prices and the peak prices
following the armistice. slight drop both
in prices of construction and rentals is seen
by him early in the year, probably in the
spring.
On the other hand. central realty will not
only hold It's present values, but must in
evitably advance, he says.
ITO get the proper psychology of the
situation" said Mr.. Greenfield, 'it must be
understood that this city was before the war
In the unique situation of being below nor
nal in prices of dwellings. There was at
that time surplus of houses Of about 10000
over the normal demand. From 10000 to
15.OOO houses yearly were hNing constructed.
and as the increase in population did not
keep pace with this progress prices natu
rally fell below normal.
THE owner consequently found himself
compelled to sell often at loss, and as it
was difficult to sell 1t" had to rent for what
ever rent he could get. 1t was an economy
to rent a house below the rate that 1t should
bring rather than leave 1t vacant exposed to
the ravages of weather. the vandalism Of
small boys and other forms of deterioration
lHat go WIN vacant properties.
Got Used to Old Rentals
$50 people got used to these rentals. which
meant loss to the owner, and in time
came to regard them as normal
Then came the war with CONSEQUENT
shortage of production. Men and materials
were in demand, as was also money 1t
did not take long for the building business
to slump. This. together with great influx
of outsiders, took up the shortage and finally
reversed the condition until we had 80 900
fewer houses than were needed to house our
population.
with the inexorable law of supply and
demand at work. prices naturally went up.
The cost OF labor and materials went up and
up. and later assessments and taxes, to-
geth"r with water rents and all other carry
ing charges, advanced Taxes in fact. have
practically doubled since the war period.
WINE the prices of other things that the
householder had to buy advanced several
times their pre- war rates. that of realty
went up to aS high as $50 per cent over
that time. But in most cases the advances
on other goods in dollars and cents was
comparatively small item: that of rental
represented the largest single item in his
budget. Consequently. ne felt it heavily and
the cry of proftcering went up.
But while there were isolated cases OF
pr"tit."ring among landlords, for the most
part II was more apparent than real. The
tenant was really paying but little more
than the normal rates should have been all
along.
Salaried Man Suffers
The man with the fixed salary, who has
perhaps received q cut in recent months bao
suffered. He cannot make ends meet md
naturally these high prices seem unjust. Ue
will not really be able to come into his own
until the adjustment is completed and nil
the factors that went to raise his costs bnve
been brought back to normal. When they
are in few years he may see a reasonable
reduction in costs.
Naturally the builder will shortly mola
an effort. to relieve the congestion and viii
doubtless make up the shortage in houses
But at that prices will never descend 70 tbc
prc-war level and he will never again ner
nit surplusage of buildings to exist sucbS
ms brought him heavy losses in the earlier
days.
"One important factor that affects adjust
ment OF this situation IL the condition OF the
money market and the attitude of our banks
and other financial agencies Money is in
demand and when you consider that banks
are able TO realize 7, ~ and per cent
by investing in other securities they aro
not willing to invest In mortgages that bring
them about q per cent.
LAS public institutions handling the pub
lies money, they should have enough in
terest in the public welfare to make some
provision for future building. even at a Iogy.
1t should also be remembered that real estate
is not the huctuating investment that seCuri-
ties are and loss in principal often wipes
ont gains in interest.
* great deal of money. too. is tied IN
for many years in Liberty Bonds. and il
will take considerable time for this money
gone out of the market to be restored, XII
Of these conditions tend to make new build.
ing dificuit.
EIt must also be considered that, while