This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
It is also important that the expert keep himself well posted as to current values, especially where increases have been sudden. The expert must learn to differentiate between a permanent rise and one that is evanescent or purely speculative. Striking illustrations of this are the Carnegie boom and the rise in the Pennsylvania Terminal section. Following the first Carnegie purchase in February, 1899, there was a rush to buy on Fifth
Avenue on "Carnegie Hill." This continued far into 1902, and yet I know to-day of many instances where owners are trying to sell at a great discount or are holding their vacant property paying large interest and charges hoping that the figures at which they purchased will be reached again. On the other hand, there has been a rise in the Pennsylvania Railroad section and Times Square, where prices have jumped by leaps and bounds until it is very difficult for an expert to keep in touch with the ever increasing values. These values have continued to rise and will continue to increase by reason of such substantial improvements as the Pennsylvania Railroad Station, the New York and New Jersey Tunnel Terminal and the establishment of other subways and means of transportation in the immediate neighborhood. It is difficult to discriminate between such permanent and stable values and the fictitious prices which are the result of a purely speculative movement. A thorough study of the cause of these sudden rises will enable a competent expert to decide whether these values will fluctuate or remain stationary.