Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-01
|BLAMES HYSTER|A
FOR REALTY PRICES
n. R. Daniel Says Investors
Who Keep Faith Will
Make Fortunes.

A survey of the real estate bond
situation makes plain that "hysteria
and mistruSt are much more respon-
sible for present market conditions
than the actual fundamental condi-
lions In improved real estate" accord
ing to H.. r. Daniel, who recently re-
signed as vice president and director
Of s. w. Straus & Co. to become a
partner in the investment firm of E.
D. Babcock & Co.
Real estate bonds are. at. present
pre-empting most of the activities in
the unlisted securities market" said
Mr.. Daniel. This Is due to the fact
that the holders OF real estate bonds
are flooding the market with these Of
ferings not because there Is anything
wrong basically with real estate con-
ditions. but because the business de-
preston has forced many Of them to
liquidate their holdings In order to get
ready cash. The market thus has been
forced to lower levels which in turn
has added to the alarm Of many of the
holders Of these securities, and through
sheer fright they have been throwing
over their bonds. A vicious circle in
the real estate bond. situation has thus
been created which manifestly has
placed improved real estate In a false
light with the public.
Conditions Improving.
cit should be borne in mind that
basic conditions in improved real es-
tate really have been growing better
since 1925. At that time the excessive
building programs of the preceding
nVe years came to a close, and it is
doubtful II the erection of new build
ings during the last five years has been
sufficient to meet the requirements of
normal times. During the last five
years. therefore, the processes of LAYING
a good, solid foundation have been
going on.
"Since the beginning of the present
business depression more space, of
course, has been available, but this is a
temporary condition. When the de-
preston is over real estate conditions,
by reason of the slower building activi-
ties during the last five years, should
come back rather quickly.
These are the points which the
holders OF real estate mortgage bonds
should not overlook. They mean that
some splendid opportunities are now
available for those who have the vision
and faith to go along with the situa-
ton. 1t is our opinion that many
fortunes are now in the making by
those who are taking advantage of the
present situation in the real estate bond
market and are picking and choosing
issues that now are selling far below
their intrinsic worth"
Real estate mortgages recorded In
the principal urban districts of the
country in June declined Is per cent
in volume from the total of the same
month q year ago, according to a
monthly compilation issued by Nelson,
Hunt & Co. of Chicago. This June fig
ure was also II per cent below that of
May, this year.
Decreases Shown.
Tabulation of official reports from
selected representative metropolitan dis
trictS, comprising more than one-half
OF the urban population of the United
States covered in the survey, showed
total of $201, 1873, SAL in real estate
mortgages filed in June. Thirty cities,
for which comparative data were avail
able, reported total of $163, 819,2 in
mortgages for June, this year, as against
1922, 285, 1925 in the same month in 1890
Analysis of the figures compiled in
the survey showed that nine cities re-
ported a gain in June over the same
month last year in the volume of real
estate mortgages filed. Buffalo. with
total of $7,868, 1913. more than doubled
its volume for June, 1880, and the
Oklahoma City total of $3.O98. OTIS rep
resented a gain of $2,500,000 over a
year ago. Boston, Kansas City, Kans :;
Grand Rapids and Rochester, N. Y,
showed increases CT more than $4,000
over June last year. Omaha's total was
$500, 900 larger than last year, and slight
gains were reported by st. Paul and
New Britain, Conn.
The greatest loss in volume of realty
mortgages was reported from Pitts
burgh with a total of S6,325, O22. repre-
senting a decline of SO per cent from
June, 1880. Cleveland, with a. total of
$500, 243, was 81 per cent below last
year.