Contributory value of screened patio.

[Waltouflog]

I am appraising a home in Ridgeland, MS that has a very large screened in patio area. The patio area is between the main home and the pool house, and the owner advises the cost of screening in this large area is aprox. $100,000. There are not many homes here that have this amenity, and I am wondering what some of you may allocate for this feature in areas where it is common. Is it a percentage of cost new?
Thanks for any help.
Cole Spencer

 

[ucbruin]

Got a photo to share....

 

[J Grant]

I am appraising a home in Ridgeland, MS that has a very large screened in patio area. The patio area is between the main home and the pool house, and the owner advises the cost of screening in this large area is aprox. $100,000. There are not many homes here that have this amenity, and I am wondering what some of you may allocate for this feature in areas where it is common. Is it a percentage of cost new?
Thanks for any help.
Cole Spencer

100k to screen an area, even if large ...it is possible the owner's figure is inflated. Cost figures to screen should be avail on the internet or a cost service.

How big is this area? If it is possible, it is an over-improvement. If the average screen patio is 200 sf and a desirable large screen option 400 sf, and your subject screen patio is 2000 sf (for example), it is far above what most people would need or enjoy and can be ugly or negative. Depending on size, quality, etc basing it only as a percentage of cost might not result in the MV contribution. Even if it did coat 100k to construct ...

 

[Terrel L. Shields]

Almost certainly a functional over-improvement. So, what does the house represent? A $200k house? A 2 million dollar house?

I would try to find a large screened in comp, and try to extract a dollar per SF contribution. Maybe it is estimated at $30/SF cost but $10/SF contributory value. And use accordingly by the SF. Otherwise, you are stuck with depreciated cost and no real idea of how much of the depreciation is due to function. So, you need some sort of proxy for the screened in porch. Perhaps a pool, a shop, or some other item similar to it. Again, I would try to be extracting the percentage of depreciation then using the actual costs as the RCN, subtract the physical then the functional depreciation.

 

[Tom D]

What's the value of the subject. What does $100,000 mean in a high priced home. I always ask the owner if they were going to sell the house tomorrow, would they put in a $100,000 scrn patio.
For $100,000 you could build a small 2 bedroom house on that patio. And what is a large screened patio size. How are we supposed to really give an accurate replay to a vague question.

 

[J Grant]

MV references the typically motivated buyer ...most of whom a screen patio max of X sf is the top end . An individual buyer who wants a giant pool, a giant screened patio, a 12 car garage, and so on - l, good for them, enjoy it - but the vast majority of buyers won't want or need it . When it is super adequacy or over-improvement - it is a value in use to the particular owner rather than market value to the general market of buyers.

This subject, if the patio is integrated into the design and architecture, might be a unique situation..

 

[Tom D]

MV references the typically motivated buyer ...most of whom a screen patio max of X sf is the top end . An individual buyer who wants a giant pool, a giant screened patio, a 12 car garage, and so on - l, good for them, enjoy it - but the vast majority of buyers won't want or need it . When it is super adequacy or over-improvement - it is a value in use to the particular owner rather than market value to the general market of buyers.

You just named everything you can find in multi million dollar neighborhoods. Maybe not all in any one house, but some overbuilt item on a crazy list. So you would look in a less priced neighborhood to find the value in use. On a 5 million dollar house, in a million dollar neighborhood what does over priced item mean. Surplus cash doesn't care about cost. This typically motivated buyer is different from the middle class buyer.

Again, we don't know the values, or motivated buyer class, near the house. In this case, we are both right. How far do you have to go to find this answer.

 

[Overimprovement]

Any market-derived adjustment would have to come from your market and sub-market. For many homes with a screened porch that large, it could almost be seen as a requirement because of how the home was designed, or to fit in with homes around them.

Pictures and actual measured size of the area and house would be very helpful. City might be helpful too if anyone here is familiar with that particular area.

 

[J Grant]

You just named everything you can find in multi million dollar neighborhoods. Maybe not all in any one house, but some overbuilt item on a crazy list. So you would look in a less priced neighborhood to find the value in use. On a 5 million dollar house, in a million dollar neighborhood what does over priced item mean. Surplus cash doesn't care about cost. This typically motivated buyer is different from the middle class buyer.

Again, we don't know the values, or motivated buyer class, near the house. In this case, we are both right. How far do you have to go to find this answer.

The thing is, we are not valuing it for the value in use.
We are valuing it for market appeal - yes in high-end houses, we might see more items that are custom or even odd or super adequacy, but the custom features are usually not problem laden in th better properties -- even if a pool is large, it is large in proportion to the house and lot, rather than monster size ( as an example )

I like to compare homes from similar feature areas even if X distance and houses in reasonably similar price ranges- the same applies whether low, middle, or high value look at older sales, take to RE agents, etc. depreciated cost to build is one area os support but not the only one to rely on.

 

[alebrewer]

IMO, a screened patio will provide similar utility as a large deck, outdoor living area, putting green, etc. Its a feature not desired by all market participants - hence the idea of functional super-adequacy.