The San Francisco Call. Newspaper, December 25, 1895, Page 32

THE SAN FRANCISCO CALL, WEDNESDAY, DECEMBER 25, 1895. THE OUTLOOK FOR CALIFORNIA COUNTRY AND CITY REAL ESTATE. Most of the Local Brokers Take an Optimistic View of Things and Predict a Steady and Sound Increase in Values Based Upon Actual Worth—Ilany Improvements of City Property Expected During the Coming Year. With a view to offering some useful suggestions on the real estate outlook for the new year, THE CALL presents herewith | a series of communications from the brok- ! ers, whose experience and jnd_gmen_( qualify them to discuss the topic intelli- gently. The opinions will be found un- usually interesting, dealing as they do with living issues, while their conclusions will have all the weight that comes from intimate knowledge of the subject under consideration. i i A Prosperous Future. | Much has been written of the late past | d of disaster, but it has laid the foundation of a good real estate market by establishing property values at a reasona- ble s rd and in provoking energetic effort on the part of the masses of the peo- ple. Even the rich men realize that some- thing must be done o develop the latent resources of the country and to advertise these advantages in the Eastern States. One evidence of this is the organization of colonization propositions. While no one can review the unparalleled progress of this City during the last forty years from an isolated, obscure hamlet amid sand- hills and brush to her present position among the large cities of the world without being filled with awe, yet no ntful mind can fail to realize how much more exalted the attainments of San Francisco would have been with com- peting railroads, such as have developed Southern California and every other enter- { J. J. O’Farrell. prising community. The new railroad promoters are the business saviors of the central and northern portions of this State. Another movement, the effect of which would be by no means local, but benefit the whole State, would be the establishing of sugar refineries in the San Joaquin Val- ley to utilize sugar beets. It would be one more step in the diversification of our in- dustries. I firmly believe 1896 will witness a great improvement upon the resultof this year’s work in all lines of business. Sat e g o A More Active Market. Certainly there is no question which more concerns us as we approach the threshold of the new year than the out- look of the real estate market. I think a more active market is probable during the coming year, with fair prices prevailing, for the reason that money can- not be as safely invested in any other channel at present. Good real estate offers & prime security and usually produces fair and sure returns on the investment. The low prices prevailing for country real estate are beginning to attract atten- tion from Eastern people, some of whom are making purchases. The fact that the increase 1n value. I expect to see a better result from the operations of 1896 than for the past three or four years. Creeige N Home-Owners Increasing. The ambition to be the owner of re- alty so emphasized and stamped with approval by the nomenclature of civil- ized nations finds wider scope for gratification in California and espe- cially in San Francisco than perhaps inany other American communitv. The newness of the State, the original cheapness of the land, the ample opportunity to save money, the rapid growth of our City, all these and other conditions incidental to the history of this commonwealth furnish ready explanation of the fact that the pro- portion of freeholders to population is greater here than in any other city in the Union. All classes of our society is repre- sented among our real estate owners, from the merchant prince and millionaire banker to the humble bootblack or scav- enger, and nearly all purchase for specu- lative purposes. Under normal condi- tions, as they e ed, for instance, from 1880 to 1390, such speculation proved sel- dom unprofitable, but in 1890 the real- estate market entered upon a season of ar- rested growth not only, but in some cases at least values receded, and from that time until to-day the question which is almost daily asked of every dealer in realty is, “What is the outlook of the future?” | There have not been wanting those who have in every spring since 1890 announced that lively times would return next fall, and assured us every autumn that the revival would be due next spring. But those who have care- | fully observed the fluctuations in real es- | tate affairs in 3an Francisco for the last | forty-five years knew that in the past active periods covering from five to seven years have been followed by seasons of equal length of dullness, hence they appre- hended the true situation in 1891, and pre- dicted then that which has since become a verity, viz.: that the depression period | would be likely to continue for five or six years. That perlod has now passed and optimists and pessimists alike begin to see the dawn of a better day. The trend of a settled policy once entered upon commercial confidence is sure to return, followed by a renewal of O. F. von Rhein. business life and that by a strengthening of real estate values all over the country. Our section will benefit by this general re- action, but there are additional causes which will especially apply to Cal- ifornia, such as the completion of the Valley road, the determination to push the Nicaragua canal the co-operation of the better elements of all parties for the purifying of our municipal politics. All these are events full of promise, but fur- ther, our orange crop of last year was the heaviest in the history of the State, it is estimated that the crop of the present year will exceed it by 15 per cent. Wheat which sold last year for less than cost of produc- tion has risen to a figure that will be re- munerative to the farmer. Grapes and wine have doubled in price within twelve months. All these are indications tending to show that once more history will repeat itself and that the year 1396 will mark the beginning of another era of prosperity which will last at least to the end of the present century. ERE I The City Is Growing. As to the future of San Francisco—the City is growing; it has grown while we slept; it has grown even in hard times and grown well. Also the number of George D. Toy. resources of this portion of California are now becoming better known throughout the Eastern States through the medium of lectures and advertising matter leads me to look for an increased immigration from the East to the central portion of California, which has the foundation for a greater prosperity, comparatively speak- ing, than it has enjoved. First-class land, there is now selling at prices to attract purchasers. The operation of the San Joaquin Valley Railroad next year will certainly enable the farmers of thit valley to market their products at lower rates, and enable them to make some money, which will naturally create a greater demand for! Pproperty in that section. The purchases during the past vear of Market street and other downtown prop- erties indicate that capitalists are seeking real-estate investments in preference to other securities, and shows a faith in the future of San Francisco that may be well entertained by people of smaller means.. I feel that prices have now about touched bottom, and that graduaily property will S y MecAfee. L. C homes being built and the grana business blocks erected will surprise and please any one who observes. The City is growing westward, and Rich- mond will be a thickly settled community in a few years, and all the intervening space compactly built up. The triangle included between Market street and Van Ness avenue and Sutter street without doubt will be one of the finest retail sec- tions to be found anywhere, with struct- ures appropriate to its character. The City is growing southward, and the manufacturing interests will in time ex- tend along the water front to the County line. Even in the business portion of the produce quarter improved housings are giving more dignity to that branch of trade. The development northward depends largely upon the Fair estate, and may be rapid or very slow, according to the pleas. ure of the owners of that estate. The future of San Francisco is assured. Its destiny to be a great City is manifest. The great valleys of the San Joaquin and Sacramento and all of the smaller valleys contiguous, which, fan-shaped, converge on a water level toward San Francisco, whither all their products naturally tend, and whence they would derive all their supplies, insure that result. There is no such good ocean harbor north or south for many hundred miles. I say its future is assured. The question really is, “When?" it certainly has not yet accomplished its destiny. *‘Very little of it, indeed.” ambitious San Franciscans think. But when the rest? Must the prosperity of the City be ‘left to some future generation? or will it be achieved by the present one? Advantages alone do not create success. The advantages must be utilized for success, whether of an individual or of a City. We should not depreciate good work, even if it be necessary to condemn any bad work coupled with it. We should applaud the great benefit the Soutnern Pacific Railroad has done for this State. We should applaud the great undertakings inaugurated and carried out by Claus Spreckels, and likewise honor the good work of any other deserving citizens. In plain terms, we should join hands and pull heartily and with a will for the best, broadest and highest good of our City and State. 8. A e Country Realty Prosperous. The year just closing has been a fairly prosperous one in country realty, and the outlook for the future is full of hope and most promising. It isa well-known fact that if our farming industries do not pros- per it affects the whole well-being of our State, There are several reasons why the future is full of promise, among them being the revival and prosperous condition of the mining interests in this State. The bright outlook of our wine industry, the encouraging returns that our orchardists and vineyardists have received this year, have put new life into those industries. The building of the San Joaquin Valley Railroad will necessarily entail a large expenditure of money, as also will the projected new lines of railroad in Mendocino and Humboldt counties and the completion of the coast¥ line railroad to Santa Barbara. The en- couraging work of our Hali-million Club toward building up the State gives prom- ise that at last our citizens have awakened to the importance of energetic effort and co-operation. It isa well-known fact that the southern part of the State is prosper- ing owing to organization and co-operc- tion and the energy of its citizens in ad- vertising its resources and advantages. The old-time enterprise that was once manifest in our City seemed to have de- parted and our City was fast degenerating into a large retail shopping place, but thanks to the keen business sagacity and example of our ‘new Moses,” Claus Spreckels Esq., our citizens have at last awakened to the necessity of ‘“getting a move on.” To him more than to all others do our citizens owe the present hopeful outlook for the future. Honor to those whose words and deeds Help us 1n our daily needs. What our country needs is more small farmers. There is money to be made in David Bush. small holdings of our country lands and we want varied farming such as is carried on so successfully in our Eastern States. The farmer is the backbone of any state, and the sooner our citizens realize that fact and get out of our crowded cities into the country, the sooner will prosperity come. But it wants intelligent and earn- est effort on the part of those trying. There is no country on the face of the globe that presents such inducements in soil and climate as our own California. And the man who cannot make a good comfortable home and living on a twenty- acre farm, judiciously selected, aeserves to starve. Go to the country, young man! Go to the country! = Bright Promises for 1896. In my judgment the real estate and busi- ness prospect for the year 1896 is very bright, This opinion is not the result of a hopeful inspiration, but is based on a more | or less close study of the statistics of con- veyancing in this City during the past tive years. The California Title Insurance and Trust Company, with which I am con- nected, keeps an accurate accountof all instruments which go on record in this City. Comparisons are made by the com- pany monthly and yearly, for the purpose of aetermining the state of its own busi- ness as well as the general condition of things, The company’s records show that in 1890 the recorded instruments in this City, exclusive of releases and chattel mort- gages—those, in short, which pertain en- tirely to the transfer of real estate—num- bered 18,345; in 1891, 18,968; in 1892, 16.- 837; in 1893, 14,565; in 1804, 14,404, The worst year, it will be seen, was tne last. In that year the real estate business seems to have reached its dullest period in five years. The first seven months of this year, for which the figures have been com- piled, show a decided improvement. Up to August 1 the number was 8744, and at the same ratio the total for the year will be 16,000. As a matter of fact, as every- body knows, the ratio for August, Septem- ber. October, November and December wil{ be increased. . The real estate iransactions of a city are an index to the condition of its business, The recording of deeds indicates that people are buying vroverty, and the recording of mortgages that they are procuring money to improve it or go into business. I feel that I am safe in saying that all kinds of business, and particularly the resl estate bnisiness, will be better in 1896 than in any year for a long time. LR Glorious Possibilities. Considering the appalling disadvantages under which the City has labored we can but marvel at her determined progress. Now, with all barriers removed, with every precaution that advancing civilization can aftord, with a most advantageous location at the western gateway of the Union ina region of great fertility and mineral wealth, with a delightful climate attract- ing thousands of tourists who invest in Calitornia enterprises, with new railways running to other portious of our land, and Henry P. Sontag. steamship comm’unicntiun with every portion of the earth, with the continued. expansion of vast commercial, manu- facturing and mining interests, with all these favoring factors to solve the problem of success, what can prevent the City from entering upon “‘a career of grandeur eclips- ing all past achievements'’? Upon the people of San Francisco depends the re- alization of their glorious possibilities. Upon them depends the task of spreading abroad a correct knowledge of this City’s advantages, of increasing the same in | every way possible, of manifesting in- dividually and collectively that pub- enterprise can be started by a savings bank because the laws of the State do rot allow them to loan on the kind of security which the manufacturer has to offer. The manufacturer draws from the mercantile banks and the mechanic deposits in the savings banks, and these loan in such places as will draw the highest interest in order that the banks can pay the highest dividends, regardless of therbuilding up of our own State. Learned to Pull Together. My belief in the future greatness of this City and State not only remains un- shaken, but has considerably increased during the past year. The building of the San Joaquin Valley Railroad may be taken as a bright example of' the re- newed activity, and it is made apparent thereby that all classes are united in de- veloping the State. In this City many of the rich men have not heretofore lent a helping hand and have withbheld the necessary funds from municipal and State improvements. People who acquired property and grew rich by the growth of the town were willing to let others bear ‘the burden of progressive action. Thisis in a great measure changed, and for self- protection they have been [orced to take some interest in City affairs, This has caused our progress in the past to be somewhat slow in comparison with other cities—Chicago, for instance. Had our people possessed the go-ahead and liberal spirit of the dwellers in the Windy City San Francisco would have to- | day ranked third or fourth among the cities of the Union; but it must be remem- bered that our progress, if slow, has been sure, and that San Francisco is to-day practically free from debt. This is more than can, I believe, be said of any other city of importance in this country, most large municipalities being weighed down by heavy indebtedness. This fact, now we are again on the road to prosperity, renders investments in San Francisco more valuable in proportion than in any other city. ‘We bave just gone throuch a general de- pression which commenced in 1891, and it must be said to the credit of California, and particularly of San Francisco, that both City and State came out of the panic better than any other State or city in the Union, and was but slightly affected by the financial pressure. Real estate was injured Iess than any other class of securi- ties, and compulsory sales were fewer here than in prominent Eastern cities. It is now a positive fact that the real estate market is rapidly improving throughout lic-spiritedness which attracts and ad- vances, and of exemplifyinz in all their courses a resolute belief in the | fact that the growth of the City is con- | ducive to the welfare of all. There are valious projects which, if carried out, could not fail in’ securing desirable results, one of which is the issuing| of five millions of bonds, the monev realized from the sale of these bonds to be expended iu perfecting the drainage system, beautifying the public parks und building bonlevards and recon- structing, wherever needed, the streets and sidewalks, paging out for perma- nent improvements instead of collecting | the money by taxing the people, and thereby.promoting the public convenience and beautify the City. Manufactures Wanted. The real estate market is far from active and the questions are often asked: *“When is it to pe better?” and ‘Do you think | prices will advance?”’ There are several reasons for ihe sluggish condition of this State. I think that one great trouble here ig that too much money is deposited in our savings banks, instead of using it in some industrial enterprise. The mechanic can- not carry on a large manufacturing busi- Charles C. Bemis. nessand be a large real estate owner at the same time unless he has unlimited means. And if he had these means, in nine cases out of ten, he would retire from business. The savings banks are the repositories for the earnings of the laborer, the mechanic, the miner, the professional, the wealthy widow and the retired mer- chant. Allis locked in their embrace to invest as they think best, If they choose to boom the States of Washington, Oregon, Utah or Nevada, or buy a block of United States bonds, theg do it. They take a large amount of our earnings to make business away from home. And yet we complain that the Chinaman is of nc use to this coun- try because he sends home for use the money which he makes here. To whom does the manufacturer apply when he is short of money? To the mer- onn.me bank. And why? Because the savings banks, unless he has real estats, canuot loan to him. No manufacturing G. H. Umbsen. the country, and as it is the foundation of all security and the basis of the welfare of our couutry there is every reason for con- gratulation at the return of National pros- perity. With money easy it is apparent to even a causual observer that an active market is near at hand here. Our foremost capi- talists—men who have made their fortunes by their foresight in their respective busi- nesses—are now buying while real estate is comparatively cheap. This is a good indication of a steady appreciation of val- ues and should pressage a good, sound market. To sum up, I believe that if California is true to herself, and her citizens combine for her advancement, the wave of return- ing prosperity now passing over the East- ern States will not only reach here soon, but will bring with it permanent blessings for both State and City. = :7;”)‘4 : The Light Shines Brightly. The outlook has not become bright enough to localize very much, for it isonly as we consider the great causes which are at work—in other words, survey matters in general—that we can see improvement. Backsets such as the business of this coun- try has experienced recently cause men to consider their methods of business, the re- sources of their city and State, and to investigate the advantages of other locali- ties. Thus the light of Central California, which has been hidden under a bushel for a time, shines more brightly now than ever before. The great variety of our soils and the equable cli- mate, producing a matchless variety of fruits, vegetables and flowers, are fast S. C. becoming known notwithstanding the slurs cast upon Central and Northern Cali- fornia by other portions of the State, and the persistent laudation with which these same localities cover up a mnltitude of deficiencies. The building of local railroads, the development of irrigation systems, the demolition of inflated prices 6f city and country property, the liberality of the daily | press and the forced energy and economy | are evolving new and better conditions, | hence the outlook is promising. s$EC/ e pte, B S ] Lowest Mark Reached. Relative to the present conditions and future prospects of California farm lands, the sale and exchange of which has been my specialty for years, I would say that there fias been a great depreciation in values during the last three years, but now I believe the lowest mark has been reached, and as the general depression throughout the United States is passing away, I believe real estate, and particu- larly farm lands, will take a turn upward again. I do not expect any sudden or great rise though until money can be had npon easier terms. Cheaper money and the abolishment of the mortgage tax—which falls heavily upon the farmer—wquld help to restore former values more than anything eise. Money is cheap enough at what the own- ers get, but it passes through so many A. J. Lyom. hands before it reaches the farmer that it costs him too much. I expect great things for California from the new rail- road, as when people see how profitable a railroad can be a new crop of railrond builders will spring up, and some compe- tition in freight is greatly needed. It is an old saying that ‘‘competition is the soul of trade.” Demand for Residences. Although the recent advance in the rate of taxation affected the real estate market to some extent, now that the first feeling of depression has worn off the market is recovering and a steady, healthful tone has been infused that bids fair to continue. The low rate of interest paid by banks on Will E. Fisher. deposits will necessarily induce many to invest 1n income-paying properties that will net the investor from 6 to7 percent on his purchase. The yearly settlements, which will be squared off by the first of the year, will remove the cause of the de- pression which prevailed during the past six months and much money will be freed from commercial demands, for the profita- ble employment of which real estate offers the best choice of investments. Another feature of the market which is a sure indication of permanent improve- ment is the demand for residence pron- erty of medium price, unerringly &stab- lishing the fact that many who a year ago could not afford to take any money from their business feel now that they can safely do so. Indeed, for the year 1896 it may be safe- ly predicted that ‘many small investors will be found for properties ranging from $5000to $10,000, and it is just this class of buyers * who give buoyancy to the real estate market. Itis equally certain that capitalists will continue to be large buyers because of the assurance that such in- vestments will pay a larger interest than any other that could be selected. 2SR SR BT Small Farms the Hope. I have been in the land business here over twenty years, and believe that small farming would pay well, if farmers could only get a fair percentage of what the con- sumer pays for their products. The ‘‘overproduction” cry, sometimes heard, is only true in one instance, i. e., an over= production of ‘“middlemen,” who skim the cream from the farmers’ profits. Few things are raised which would not pay the farmer well at considerably less than the consumer now pays for them. The best remedy I can see is “open ma:kenfi," not only—as some are now talking of—in this city, but open retail markete, with regu- lar market days, in every town pf over 1000 people, such as I lmvg stud{ed in so many places in Europe, in which -a farmer sells $20 worth of stuff, not only making more profit than by selling three or four times as much under the system here, but also selling to the consumer at Thomas D. Gaman. less advance on cost production; and be- ing able to do with less Jand and a smaller capital; two very important items. I could explain the benefits of these two kinds of open markets more fully, but space forbids. I will say, however, that it is to small farms we must look to build up the State, and if something is not done to make them pay better, the signs already visible of California drifting back again into the large cattle ranches will take defi- nite shape. An Active Movement, After a few years of siuggishness, owing to the financial condition of the country, real estate is now taking a more active movement, and prospects warrant the be- lief that the coming year will be a good one. The most notable improvement the past year has been in purchases for smail homes. Building for the past eleven months has greatly exceeded that of any year since 1891, the increase over the same Jacob Heyman. period for 1894 being fully 35 per cent. The work now 1u the architects’ offices and the steadily increasing demand for building lots show that we are enteringz upon an era of home-building in San Francisco. ‘While the demand is greater for small homes, where the cost comes within the means of the wage-earner, there is also an increasing number of more expensive homes being built. This demand for homes is the best indi- cation of a healthy market; there is no speculative element in it, no boom, and it puts savings into circulation, whereby mechanics and artisans may find employ- ment. Its effect on the general prosperity is quite marked, and saying that the com- ing year 1s to be one of home-building is equivalent to saying that it issure to bea year of very general prosperity. Prof Real Holdings. San Francisco is to-day the greatest City on the Western coast of North and South America; as a seaport it has no rival on David Rich. the broad Pacific, and hence must foreyer remain one of the first maritime cities in the world. It is the nerve and center- of the great State of which it is the metropolis; it is the seat of vast accumulated wealth; no city in the United States offers a more safe or broader field for conservative invest- ment of capital in real estate. I do not hesitate to advance the prophecy that if good judzment is exercised in the purchase of improved or unimproved realty in either the business or residence portion of the City during the next decade the advance on the one and the in- come on the other will yi ratio greater than similar any of the more conservative cities of the Union. San Francisco occupies a unique situ- ation and is certain of a great future if sbe is true to herself. She 4ommands the great Pacificand here on the western verge of the continent we hope to rear another acropolis and should in the near future