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Comments on the sales comparison approach:
Remote area where there is little conformity in lot sizes or characteristics, conforming neighborhoods and conforming improvements and extremely limited market activity. Further complicating the sales comparison approach is the subject's somewhat atypical design, size and room count (small single-family residence, good to excellent quality construction, finishes and features) significant outdoor amenities such as expansive decking, unusual pool and spa, large, high quality outdoor kitchen/BBQ feature, office studio with attached green house, etc.) The floorplan is open on the first level (kitchen, dining and living room) and its only bedroom is an upper level loft with a half-bath. It also relies on a wood stove for whole house heating.
Being a remote, mountainous area, there are very few sales in any given year with a wide variance in characteristics. The subject appeals to potential buyers wanting a rural and isolated vacation home or second-home property with an ocean influence. The mostly likely buyer of the subject property would look for a substitute in most areas along the Sonoma coast between Jenner and The Sea Ranch.
The comparable sales and listing presented in this report were the most reasonably similar, recent and proximate sales identified. My primary search was focused on location; small to intermediate size acreage (1 to 20 or so acres); single family residences with 800 to about 2,000 square feet of GLA and, if possible, with one bedroom, located in the hillsides east of the ocean.
I have identified three closed sales and one listing that most closely represent these factors. Most sales have closed within the last 12 to 18 months, with one very recent sale (comparable sale #1.) This is typical for this market and property type.
Photos: Like the subject property, the residential improvements of the comparable properties could not be viewed from the street (or were only partially viewable.) I have included my own photos and also included MLS photos for each property.
The appraiser has developed adjustments over a long period of time and after performing numerous appraisals in this region and then extracting these differing values based on techniques such as the principal of matched pair analysis and continued interaction with local real estate professionals. The appraiser has also used trend analysis statistics using the BAREIS MLS system and has considered and used costs and estimated costs in developing adjustments for items like quality, condition and other amenities. This data has been applied to the comparable properties in this report when adjusting for any differences in subject's views or lot size, quality, condition, age and gross living area and market changes.
Market conditions have been stable throughout the prior 12-18 months and market change adjustments (so-called “time adjustments”) were not required.
Location: All sales located in and around the Timber Cove sphere of influence and location adjustments were not needed.
Lot size: The subjects land area is about 16 acres. Topography is hilly, rugged and steep for the most part. Very good panoramic views of the mountains and valleys along with close-in forest views. Based on my analysis of both improved and unimproved lots, I have determined that highest and best use is at 1 to 5 acres, more or less. After that, surplus land exists and it has relatively little additional contributory value when topography is steep or rugged. The contributory value can be less per acre for larger parcels with similar topography. Comps 1 and 2 have relatively small 1-acre lots and I have adjusted the variance at about $3,000/acre. Comps 3 and 4 have larger 40-acre lots and I have adjusted at about $1,000/acre. The narrow range of adjusted MV indications seems to support these adjustments.
Adjustments for variances in GLA less than 200 square not supported by market data and because most data sources for GLA for comps are unreliable. For variances lager than that, an adjustment of $100/sf reduced the market value indications to the narrowest range. This is based on trend analysis and further refined by sensitivity analysis (varying the adjustment until the effect was neutralized as much as possible.) This adjustment has been rounded to the nearest $1,000.
The market is not sensitive to chronological age of residential improvements and no adjustments for age difference were necessary.
Quality adjustments, when necessary, are based on the estimated base construction and appointment cost differences per square foot of the comparable sale. Most of the comparable properties presented are within the range of the Q3 rating, some higher and some lesser. Comparable 3, is somewhat inferior to the subject in construction and finish quality and an adjustment of about $20/sf in cost differences was supported (using the residential cost tables found in the California Board of Equalizations Residential Cost Handbook AH 531.)
Condition adjustments, if any, reflect my estimate of market reaction to costs and analysis of matched pairs found over time and in various assignments. Condition estimate based on MLS public and private comments and interior photos (See MLS Photo page exhibits.)
No adjustments for variances in total room or number of bedrooms. Half baths not adjusted. Fireplaces and other features are nominal and an adjustment cannot be supported. No adjustments for variations in decking, patios, and other such outdoor features unless these items were significantly inferior or superior to the subject's decking.
Outdoor amenities: The subject has an additional structure of about 360 square feet. It is of average to above average quality and condition and is currently used as an office with and attached green house. Comp 2 has a similar building. Comps 1 and 3 do not and I have estimate contributory value at about $10,000 which is reasonable (not too much or too little) as it is a favorable amenity for rural properties.
None of the comparable properties featured a pool amenity and all required an upward adjustment. This was unavoidable due to the limited number of sales that could be identified as comparable. The subjects pool is a very favorable feature both as a practical feature for swimming and recreation but also an aesthetic feature of the overall property. Its redwood water tank design harkens to an earlier time in this remote timberland and it’s unique filtration system (a water sluice that uses biotic life to filter and return the water rather than use of chemicals is an environmentally favorable feature.) The adjustment is reasonable and is approximately based on the depreciated cost. The adjustment is also typical for a pool feature made for other properties in other markets.
I could not find support for making an adjustment for the subject favorable amenity of a large, high quality outdoor kitchen and BBQ area.
Comparable 1: 31523 Seaview Rd– August 2018 sale of a property located on Seaview Rd. Smaller, 1-acre lot required an upward adjustment as noted above. This property has a distant view of the ocean but no panoramic view to the east. The difference is offsetting and I have made no adjustment. Larger, custom home with two bedrooms and two baths. Older construction, well maintained but not recently updated. No significant outdoor amenities. Conventional financing, 146 days on market, gross adjustments of 16%, adjusted MV indication of $645,000.
Comparable 2: 31455 Seaview Rd – Very recent sale (July 2019) and also located on Seaview Rd. Smaller 1-acre parcel adjusted as noted above. This property has a very good blue water view and a downward adjustment was needed. Similar GLA, two bedrooms and two baths. The property has a finished walk-out basement, estimated at about 700 square feet (based on interior MLS photos) and I have made a downward adjustment of about $30/sf. One car, built-in garage. No significant outdoor features. Conventional financing, 299 days on market; 17% gross adjustments, adjusted MV indication of $650,000.
Comparable 3: 23570 Fort Ross Rd – This property is located to the south and east of the subject property along Fort Ross Rd and is more associated with the Fort Ross area than the Timber Cove area. Not enough data to support a location adjustment. Similar in GLA and room count. The photos tend to make the residence appear larger than it is but that is because most of the floor area is at the entry level and it has 20’ walls with windows to allow for more light. Of particular note, the one bedroom is a loft room, similar to the subject. The larger 40 acre lot was adjusted at $1,000 per acre for 25 additional acres of surplus land (see above notes.) No significant outdoor amenities. This property is off the electrical power grid and must use a solar PV system with back up generator. I have adjusted for the estimated market reaction to the cost of the system. The MLS confidential remarks state that the property was sold with an overgrown yard and deferred maintenance to the residence.
Comparable Listing 4: 21485 Fort Ross Rd – This is a pending sale of a property located between the Timber Cove area and Cazadero property. It has less of a coastal influence and more of a dryer and warmer micro-climate. I have made a location adjustment based on pricing closer to the Russian River resort area as opposed to the coastal area of Timber Cove. The adjustment is about 5% of the pending sale price. Larger 3 bedroom of somewhat lesser quality. The 40 acre lot size was adjusted as noted above. No outdoor amenities. Potential MV indication of $649,000.
