Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-07-24

IN the uSnC OF the TACT tndL the TO-
tai value of real estate in the United
States is estimated at $3.50, Zoo. 100000,
the real estate business may be said
to be the biggest business in the coun-
try. Every one of the tens of millions
of owners Of real property is engaged
in it in the sense that he will sell his
holdings if he is offered a satisfactory
price. and in addition there is a large
number Of persons who, owning no
realty themselves. are engaged In the
business as middlemen negotiating, or
attempting to negotiate sales.
Then, too, there are the individuals
and corporations that loan money on
real estate, the builders, the pro.
ducers and dealers in building ma.
terials and supplies, and the workers
in the building trades. all of whom are
directly interested in the real estate
business. And, last of all, there are
those indirectly intrested-the vast
army of earnest, hopeful souls who are
planning, scheming, saving, to the end
that they may become property own
erS.
1t might even be claimed that rent
ers are engaged in the business. be-
cause they are buying the use of prop.
erty, il not the property itself, and
their interests are vitality affected by
realty values and conditions in the
realty market. Including them, there
fore, puts everybody more or less into
the real estate business, except de-
pendents and inmates of charitable or
penal institutions.
Accordingly, when Ralph w. Roby,
lecturer in economies at Columbia
University. and Blake Snyder of a
New York firm of realtors, wrote
their book on Fundamentals in Real
Estate" they addressed themselves
to wide audience. one that includes
almost all those who can read and
many who cannot. The book, it may
be stated. deals entirely with the ele-
ments of the business. 1t was not
written to exploit any section of the
country, nor convince anybody that
first mortgages are the best invest
ments. 1t does not urge the buying
of real estate and is in no sense a
own-your. own-home treatise. In
fact, about the only advice it offers
is an observation to the effect that
in the long run the largest profits
are made by those who neither at
tempt to buy at the bottom price
nor to sell at the top.
Practice Plus Theory.
Their publishers claim for them
that the authors have done unique
thing in bringing the practical ex-
perience of a realtor together with
the theoretical knowledge of an econ
omist, and that the result Is a book
that provides a basis, ground work.
from which to attack the everyday
problems of the real estate business
such as buying, selling, APPRAISAL and
management.
Real estate changes ownership,
theoretically, at least, on the basis
of it's value to the seller and its
prospective value to the buyer. Ac-
cordingly, the authors undertake to
tell what it is that determines realty
values. First they discuss the in
herent characteristics of real prop
erty.
"The nature Of real estate" they
saw. "provides no less than 10 dis
tinct inherent attributes which dis
tinguish it's value from that Of other
commodities. These attributes OF
real estate are: =.
1T is an absolute necessity; 1t
offers relatively great possibility or
substitution; 1t can be reproduced
only within narrow limits; 1t Is dura-
BILE: II is an immobile commodity;
no two units of it are. Identical; its
purchase involves a relatively large
amount of money; 1t Is subject to
infrequent purchase by the average
individual; it constitutes one form
of conspicuous consumption ana 1ts
ownership carries prestige.
The fact that real estate is neces'
sity. 1t is pointed out, tends to remove
anv limit upon the level or value
which may be reached. and its non
reproducible nature tends to make any
increase in demand unusually enec-
tive and to cause values 10 advance
RAPIDLY at points Of concentration. Its
durability has a tendency to enhance
it's value, because it Is CONSIDERED oy
the purchaser as a permanent invest.
ment, and to increase the stablllty OF
its price, because it makes available
not only short-term commercial creolt,
but long-term investment credit. :,
It's immobility causes the price at
which it may be sold to vary widely
from one part Of the country TO an
other and makes the element Of ioca-
ton significant, while the infrequency
OF purchase by the average individual,
the lack Of compatibility between any
two units and the relatively large
amount of money involved all tend to
add to the elaboration which Is found
in the purchase of real estate and
cause a searching out for that which
is most advantageous or most desir-
able. A factor that makes for higher
prices is the social and financial pres
| tige enjoyed by property owners.
Its Dynamic characteristics. .
The second group of factors enter
| ing into the value Of real estate are
those termed by Messrs. Roby and
Snyder its dynamic characteristics,
which are those elements in real es'
tate values which are constantly sub
ject to modification or change. They
are often considered the dominant fac.