Cost Appraoch Insanity!

[Joyce Potts]

Joyce, though my comment is not specific to the string of discussion, I could not resist:

Recently I shared a table at lunch with an AI instructor...a well-respected gentleman whose name, I suspect, might be familiar to you.

I told him that I intended to sit for the AI's 45-hr. module that is the substitute for the residential demo that is a requirement for the SRA. This man is one of the instructors of the 45-hr. module. We talked for a moment regarding some of the criticisms--and the critics--of the module as a substitute for the demo. His response: He would like to see the critics enroll in the course for CE but take the exam...and see if they can pass it! Are you interested?

Lee

Absolutely, if you'll opt to do the demo as well.

IMO, both are moot at this point. It's become a bought and paid for designation anyway.

Besides, do you really think the AI Instructor is going to think otherwise? He's selling his class, dear.

Anyone ever wonder why they didn't afford the commercial candidates the cliff class too?

If the cliff class is so challenging, why not simply opt to do the demo?

 

[PropertyEconomics]

Absolutely, if you'll opt to do the demo as well.

IMO, both are moot at this point. It's a brought and paid for designation anyway.

Anyone ever wonder why they didn't afford the commercial candidates the cliff class too?

I think the commercial candidates are on $10,000 lots and the SRAs are on the $1 lots ... nice to say you own and pretty to look at ... but in the long run ... not a great return on investment ....

Just trying to tie in this comment with the thread .............

 

[hastalavista]

Anyone ever wonder why they didn't afford the commercial candidates the cliff class too?

It is my understanding they are.

 

[Joyce Potts]

It's all about dues, my friends. And a few other things side line businesses they seem to have going on.

Leave it to this crowed to make take some simple, proven concepts and argue about it until the cows come home.

Who ever said the Cost Approach was independent of any data derived from the market. In fact, the opposite is true. That said, too many can't quite seem make these distinctions, thereby suggesting that the CA is nothing but a backed into value approach with little to no merit.

It is not, if understood and applied correctly. The problem is, too many appraiser are taught to simply back into it. And who can blame them for a $350 or less fee.

 

[Joyce Potts]

It is my understanding they are.

Really? Do tell.

Not surprising, since commercial AVM's are marching to the forefront. Then they can dumb down the commercial side of things, thus similarly justifying that AVM's are just as reliable.

Makes sense to me.

 

[Michigan CG]

Tim, this would be for a long term investment. How about gentrification? Remember that real estate is cyclical and we are talking about economic obsolescence, not an externality such as a nuclear site next door.

Donna, do you remember the Chevy Chase Vacation movie where they get lost in east St. Louis? That was when I was in high school. I was in East St. Louis 18 months ago. It is worse 25 years later. It is a war zone, and vacant land everywhere.

Yes, real estate is cyclical, however it is speculative to determine how long that cycle will last. East St. Louis, central Detroit, parts of LA, south Chicago and other areas will experience gentrification......

gentrification
A neighborhood phenomenon in which middle- and upper-income
persons purchase neighborhood properties and renovate or rehabilitate them.​

.....but I don't think it will be in my lifetime.

 

[Michigan CG]

Quit whining and go back to the cost approach class for continuing ed,
you might learn something.

And that is a contribution to the discussion........?

Perhaps you can solve this whole discussion with you knowledge of external obsolescence?

 

[Michigan CG]

don't walk and start buying up those lots. There is a neighborhood on the lower east side of Manhattan known as alphabet city where 25 years ago you could have bought burnout tenements for $1. Drug infested, hookers,crime etc...awful place back then. That same tenement renovated and converted to condos would now be worth about $3,000,000. Do some assemblage and the sky is the limit. Detroit can't stay down for ever. someday there will be revitalization.

20/20 hindsight is great....speculation is like playing the lottery. Take you lower east side of Manhattan and buy that property up, pay taxes and get rich. Spend the same money in East St Louis or Detroit 25 years ago and you are now a hooker paying the property taxes and the special assessments for land worth what you paid for it.

However there are great parts of Detroit that have experienced great revitalization.....but there are may parts that will not see anything for decades.

But I understand what you are saying.

 

[jay trotta]

skimmed thru alot of this, back to the original question; the lot value ?

you are attempting to compare a lot purchase in & around the market High -and with 2006 dollar (real money) values.

last time I checked it's 2008 - the value of a Dollar has declined, housing prices are dropping like flies; Your working a sub-division around a lake with nothin but REO data and I just want to clarify.......your attempting to find a Value for a Lot.......ROFL

In your best Johnny Carson voice, who was the mystical jenie he made up ?

the envelope please.......PFA - see you need some mystical majic to even think of what your attempting - I won't follow you to any hearings

Good Luck

 

[PropertyEconomics]

Donna, do you remember the Chevy Chase Vacation movie where they get lost in east St. Louis? That was when I was in high school. I was in East St. Louis 18 months ago. It is worse 25 years later. It is a war zone, and vacant land everywhere.

Yes, real estate is cyclical, however it is speculative to determine how long that cycle will last. East St. Louis, central Detroit, parts of LA, south Chicago and other areas will experience gentrification......

gentrification
A neighborhood phenomenon in which middle- and upper-income
persons purchase neighborhood properties and renovate or rehabilitate them.​

.....but I don't think it will be in my lifetime.

For a dollar .. my grandkids can have it ... hell if they get $5 for it ... thats a 5 fold increase over our life time. Not bad ehhhhhh?

Oh wait .. I dont have grandkids ... hmmmm ... I will think of someone to leave it to.