0 value. Am I right?

[Kalen mills]

I am assisting with a post flood valuation. The property is a small 20 home community of second home/vacation homes where every one who was there died. Most homes were completely washed away including the subject. I am aware of the Cost, Use, Risk effects on value, and the further I get down this rabbit hole, the more I think this property is worth $0. There are many factors that contribute to this. There are County restrictions requiring the structure to be raised 6 ft, the common elements (pool, common area, and park area) is a field of broken glass, and other requirements that necessitate a large expenditure. The amount of money needed to bring it to its former use is greater than its land value. A change in land use to an RV park is more suitable. The Risk factor is also significant as everyone who was there at the time died. There is a stigma. I am just interested in hearing opinions.

 

[Artemis Fowl]

Zero value is essentially saying you can't give it away for free. This implies there is no market for the property. If there's no market for the property then the Market Value definition does not apply.

 

[J Grant]

I am assisting with a post flood valuation. The property is a small 20 home community of second home/vacation homes where every one who was there died. Most homes were completely washed away including the subject. I am aware of the Cost, Use, Risk effects on value, and the further I get down this rabbit hole, the more I think this property is worth $0. There are many factors that contribute to this. There are County restrictions requiring the structure to be raised 6 ft, the common elements (pool, common area, and park area) is a field of broken glass, and other requirements that necessitate a large expenditure. The amount of money needed to bring it to its former use is greater than its land value. A change in land use to an RV park is more suitable. The Risk factor is also significant as everyone who was there at the time died. There is a stigma. I am just interested in hearing opinions.

How large is the property you are appraising? Is it vacant land at this point?
I am not clear if you are appraising an individual lot, a house on a lot, or the entire tract.

If there were other communities in the area affected by the flood, what is the buy-or-sell activity in them? Research past similar affected areas to see if damaged homes sold.- and if there is a residual value for the land. It is a complex assignment, and can not imo just assume a zero value.

FEMA often assists in rebuilding an area and can offer $ or a grant to clean the property up . Investors often buy damaged homes or land in these areas, because they believe that property values will eventually rise ( though it does not apply to all areas - there is no one-size-fits-all all answer )

 

[CGinMN]

Is there a movement to revitalize the town after the flood? Is there infrastructure being planned to mitigate future flooding? Is rebuilding feasible, and would the future use be insurable? If a change in land use to RV park is more likely, then why would the site have no value? These are some of the questions I would be asking.

 

[Terrel L. Shields]

A reflection upon the HBU would suggest that the HBU "as if vacant" is worth SOMETHING. What would that be? Perhaps an RV park, but also perhaps simply being a tract of land for conservation uses. Nature Conservancy and land trusts frequently take or buy such properties as watershed protection or wildlife habitat.

So, no. I would say the property does have a value...just not as a residential homesite.

 

[J Grant]

A reflection upon the HBU would suggest that the HBU "as if vacant" is worth SOMETHING. What would that be? Perhaps an RV park, but also perhaps simply being a tract of land for conservation uses. Nature Conservancy and land trusts frequently take or buy such properties as watershed protection or wildlife habitat.

So, no. I would say the property does have a value...just not as a residential homesite.

Nobody can conclude that over the internet.

 

[Terrel L. Shields]

Nobody can conclude that over the internet.

It is a safe conclusion since the NC and similar land trusts are eager to obtain conservation lands, small and large. I have appraised a couple dozen of them in the past 10 years. flood zones, unplowed prairies, etc. They have an intrinsic value related to a HBU as vacant. To say any property has "zero" value is a dangerous statement. Brownfields sell. Flood zones sell. Swamps sell. I was by one yesterday with a RE sign and behind it were lily pads and a few white egrets or herons wading in the water. It's wetlands and would have to be mitigated to fill in and build on but it can be done, and the property is not offered for free.

 

[J Grant]

It is a safe conclusion since the NC and similar land trusts are eager to obtain conservation lands, small and large. I have appraised a couple dozen of them in the past 10 years. flood zones, unplowed prairies, etc. They have an intrinsic value related to a HBU as vacant. To say any property has "zero" value is a dangerous statement. Brownfields sell. Flood zones sell. Swamps sell. I was by one yesterday with a RE sign and behind it were lily pads and a few white egrets or herons wading in the water. It's wetlands and would have to be mitigated to fill in and build on but it can be done, and the property is not offered for free.

Your idea of conservation use might turn out to be the HBU, but instructing someone over the Internet to conclude it is another thing.

I agree that a conclusion of no value is not supportable yet, at least based on what the OP has said so far-. It would help if they verified what kind of property they are valuing. One lot, the whole tract, a damaged house?

 

[Bobby Bucks]

To say any property has "zero" value is a dangerous statement. Brownfields sell. Flood zones sell. Swamps sell. I was by one yesterday with a RE sign and behind it were lily pads and a few white egrets or herons wading in the water. It's wetlands and would have to be mitigated to fill in and build on but it can be done, and the property is not offered for free.

I agree. I know a guy who buys and holds "worthless" parcels. He usually buys them from large companies that have them on their books, city governments, etc. One great example, he bought a weird triangle shaped lot owned by a company where a mill used to be when they still made things in the US. It was next to a railroad that is no longer there, the roads have changed, the neighborhood has changed. Tax value was laughable. He held it for 25 years and now they are building townhouses all around it and guess, what, it's getting rezoned and he will make out like a bandit.

 

[J Grant]

I agree. I know a guy who buys and holds "worthless" parcels. He usually buys them from large companies that have them on their books, city governments, etc. One great example, he bought a weird triangle shaped lot owned by a company where a mill used to be when they still made things in the US. It was next to a railroad that is no longer there, the roads have changed, the neighborhood has changed. Tax value was laughable. He held it for 25 years and now they are building townhouses all around it and guess, what, it's getting rezoned and he will make out like a bandit.

Exactly. He might have paid a very small amount for the parcel, but he probably paid something at the time.