Costar Conundrum

[George Hatch]

When CoStar gutted Loopnet's functionality and broke their listings down between what was publicly available vs what only their paid subscribers could access I thought that was a weird thing to do - now only subscribers can see the listings that Co-Star was developing. For a while they were showing the markers for their private listings, but now they're not even showing that on their public listings page. All I'm seeing is an apparently declining number of listings.

 

[Raven59]

I dumped CoStar about a year ago. The data was unreliable, many times appearing made up. For me, local networking with other appraisers has been sufficient and more reliable. CoStar's pricing has tripled from when I first subscribed. LoopNet has been gutted and is now worthless.

 

[Terrel L. Shields]

The data was unreliable

They used to put deliberately false info in to catch someone using their data.

 

[Deleted member 152047]

They used to put deliberately false info in to catch someone using their data.

They still do. You will hardly ever find land sizes and building sizes that are accurate. They may be off by 3, 4, 10 SF, but they do that deliberately.

 

[Deleted member 126639]

A lot of Costar hate. Personally, I think they have gotten a lot better. They certainly are more accurate than appraisers, and more importantly - they drive the market. Tenants and buyers for anything remotely investment grade ALL use Costar, and they don't care what appraisers think.

Many appraisers can't get the volume necessary to make a living because they keep thinking every comp needs to be verified down to the finest degree. Nope. Institutional investors will only do that for very high dollar sales, and no one outside of appraisers thinks twice about rent comps outside of what is on Costar and to a lesser extent Compstak. Costar, for better or worse, makes the market at all but the highest end deals.

I mean, if you're appraising exclusively <$1,000,000 commercial property, I guess you could get by without it. If you're in a very rural place, maybe there as well. But in any major metro area, you are going to be limiting yourself to the bottom tier work, which typically has the lowest fees.

If you want to do $2,500 jobs (or less) forever, getting rid of Costar is the way to do it.

 

[Raven59]

They used to put deliberately false info in to catch someone using their data.

Interesting. Good way to lose a client, too.

 

[Michael P Jacobs MAI]

They used to put deliberately false info in to catch someone using their data.

I have no problem with that particular issue since the "plant" is minuscule. Surveys and public records vary by a lot more, in fact.

 

[Sid Holderly]

In some cases, data can be found on https://www.narrpr.com/ the NAR database of sold data and County records.
Many County GIS sites have ways to search sales of various types by the Property Class.
Many Counties in IN do not post regularly to the State DLGF Sales Disclosure site http://gatewaysdf.ifionline.org/Search.aspx

 

[Terrel L. Shields]

NARRPR seems a good tool if fully developed.

 

[Deleted member 126639]

Interesting. Good way to lose a client, too.

Most clients use Costar... If anything, significant variance from Costar will be a red flag. Never had a client tell me I used the wrong number when I used Costar. But I have had them come back and tell me when my number differed from Costar (invariably, this was with a property I already appraised)

At the end of the day, Costar dominates and defines the market. They are the authority, however unreliable appraisers may find them. Brokers, developers, asset managers, loan officers, and even review appraisers overwhelmingly consider Costar the authority. The reality is only appraisers spend excruciating amounts of time attempting to verify and figure out a transaction. No one else bothers, except in very unusual cases.

Appraisers once were paid to have this "special knowledge", but those days are long gone. Our job is to report on how market participants make decisions regarding value. And if Costar has large amounts of data for a particular asset type, market participants just use it. For them, it is good enough, especially in aggregate.