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April 2014 – Access to a bibliography of historically significant valuation and mortgage risk books and documents from the first half of the 20th century

April 30, 2014


AEI’s International Center on Housing Risk has assembled of a bibliography of historically significant valuation and mortgage risk books and documents from the first half of the 20th century.

The oldest book (1903) is Richard Hurd’s Principles of City Land Values. This book is widely considered to be the first United States’ treatise on city (non-farm) land values. A few of his insights are noted below.

This bibliography is dedicated to Professor Richard Ely (“Under all, the land”), University of Wisconsin (1854-1943), the father of land economics and real estate studies as academic disciplines. Many of the authors listed in this bibliography were his students and colleagues.

To receive access to PDF copies of the historical valuation and mortgage risk documents bolded below, please contact Emily Rapp at Emily will share a Dropbox folder titled “Appraisal Theory History”, which will grant access to the requested documents. Non-bolded/underlined items are not in the public domain; they may still be in print or vintage copies may be available for purchase over the Internet.

1903, Hurd, Principles of City Land Values—this seminal work that is widely considered to be the first treatise on city (non-farm) land values. After 110 years, Hurd’s annunciated principles still inform property valuation theory and practice today: Below are listed a few of these principles:

  • While intrinsic value is correctly derived by capitalizing ground rent, exchange value may differ widely from it.
  • Value in urban land, as in agricultural land, is the result of economic or ground rent capitalized.
  • In cities, economic rent is based on the superiority of location only, the sole function of urban land being to furnish area on which to erect buildings.
  • Since value depends on economic rent, and rent on location, and location on convenience, and convenience on nearness, the intermediate steps may be eliminated and say that value depends on nearness.
  • Land prices on the outskirts are lower as area increases as the square of the distance from any given point.
  • General financial and economic conditions enter so largely into exchange values, that values are at times not based on income, or supply and demand, but represent simply a condition of the public mind.
  • If a new utility does not arise, exchange prices may advance and recede, while intrinsic values do not change.
  • o If a new utility arrives, both exchange prices and intrinsic values will alter their levels.

1913, Bernard, Some Principles and Problems of Real Estate Valuation,—ONLY AVAILABLE FOR DISTRIBUTION WITHIN UNITED STATES

1923, Spilker, The Real Estate Business as a Profession, the book covers real estate appraisal, planning and zoning, common and statutory law, subdivision development and ethics (among numerous related topics). It was utilized the text as a part of the curriculum for the real estate certificate and degree program offered by the University of Cincinnati at the time.

1927, National Association of Real Estate Boards (now the National Association of Realtors), Real Estate Appraising Chapters 1-10—the Appraisal Institute’s The Appraisal of Real Estate (now in its 14th edition) traces its linage back to this book collected and organized by Arthur Mertzke, director of education.

1928, McMichael, City Growth Essentials, a great treatise on the development of cities by one of the leading writers and publishers of valuation and appraisal books starting in 1920 to the 1960s.

1931, 1937, 1944, 1951, McMichael’s Appraising Manual, given its many fully revised editions, McMichael’s allows one to trace changes in appraisal methodology from the 1920s to the 1950s. Original editions are sometimes available over the Internet.

1932 Gries and Ford, The President’s Conference on Home Building and Homeownership–contains much historical detail about home ownership and mortgage conditions in the early 1930s.

– 1933, Hoyt, One Hundred Years of Land Values in Chicago, still in print

1934, Alger, Alger Commission Report—report by commissioner appointed by the Governor of New York to investigate the causes of the collapse of both the private mortgage backed bond market and private mortgage insurance industry. Report provides specific recommendations which were central to the state regulatory structure which accompanied the 1957 rebirth of the private mortgage insurance industry.

1936, FHA How to have the home you want—FHA’s first consumer brochure. Contains these quotes:

  • “To many people, ‘Mortgage’ became just another word for trouble—an epitaph on the tombstone of their aspirations for home ownership.”
  • “Provide a straight, broad highway to debt-free ownership.”

1936 April, FHA Underwriting Manual; 1936 November, FHA, Underwriting Manual; 1938 February, FHA Underwriting Manual—When FHA was established in 1934, five experts in the field of collateral and mortgage risk formed the core of its underwriting and economics staff. These men created a combined mortgage risk and collateral matrix that incorporated Frederick Babcock’s concept of “warranted value” for the purpose of lending, which set out a through the cycle valuation methodology. Germany’s Mortgage Lending Value concept was independently developed 60 years later; however it bears strong similarities to Babcock’s warranted value concept as articulated in the 1938 FHA Underwriting Manual.

  • Frederick Babcock, chief underwriter and the author of:

§ 1924 – The Appraisal of Real Estate
§ 1932 – The Valuation of Real Estate

  • Ernest Fisher, chief economist and the author of:

§ 1923 – Principles of Real Estate Practice
§ 1939 – The Structure and Growth of Residential Neighborhoods in American Cities (1939) with Homer Hoyt

  • Homer Hoyt, chief housing economist and the author of:

§ 1933 – 100 Years of Land Values in Chicago
§ 1939 – The Structure and Growth of Residential Neighborhoods in American Cities (1939) with Ernest Fisher
§ 1939 – Principles of Urban Real Estate with Weimer (1939)

  • Richard Ratcliff, economist and author of:

§ 1949 – Urban Land Economics

  • Arthur Weimar, economist and author of:

§ 1939 – Principles of Urban Real Estate with Hoyt (1939)

1939, Hoyt, FHA Structure and Growth of Residential Neighborhoods,

– 1939, Weimar and Hoyt, Principles of Urban Real Estate—available on JSTOR, click here to register for a free MyJSTOR account

1941, Schmutz, The Appraisal Process

– 1942, 1953, May, The Valuation of Residential Real Estate, an excellent work on this topic.

– 1949, McMichael’s, How to Finance Real Estate

1951, American Institute of Real Estate Appraisers, The Appraisal of Real Estate. First edition of the Appraisal Institute’s The Appraisal of Real Estate (now in its 14th edition).

– 1956, 1974, Wendt, Real Estate Appraisal, contains an excellent overview of appraisal theory and appraisal practices during the middle 0ne-third of the 20th century.

1963, McFarland, FHA Experience with Mortgage Foreclosure and Property Acquisition

We are working to provide access to these two books and , if successful, will update this bibliography accordingly.

– 1932, Babcock, The Valuation of Real Estate, considered to be the most significant appraisal book since Hurd’s in 1903. In it Babcock develops his concept of warranted value. Ernest Fisher helped Babcock with this second book as both were at the University of Michigan in the early 1930s.

– 1933, Kniskern, Real Estate Appraisal and Valuation


edward pinto

Edward Pinto
Resident Fellow and codirector of International Center on Housing Risk
American Enterprise Institute
1150 17th St. NW, 11th fl.
Washington, DC 20036

AEI’s International Center on Housing Risk

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