Economic obsolescence

[Stone]

Well let's review the thread Mr. Moderator- Marion started out with the first response that was totally off point by not addressing ECONOMIC OBSOLESCENCE. Then Scott responded and he was the only one that was willing to honestly discuss his view on the subject and how he handles the issue. He also quickly understood the often difficult task of applying appraisal theory to the real world. Then as usual Cannative jumped in with his typical crap and snide remarks. Then Rex chimed in with his simplistic "next" comment. Others posted their typical read the manuals, you don't know how to do the cost approach comments and generally condescending comments, big shot Stone offered no input on how he deals with the issue except took the time to sling a few arrows etc etc...
You tell me then-who amongst your friends here acted like a professional except for Scott?

It's becoming darn near impossible to have an honest discussion/debate on appraisal issues without Cannative jumping in with his idiot comments as well as some of the other high and mighties here.

Maybe if you would have moderated early on in the thread you could have prevented the idiots from participating and could have kept it professional!

I doubt even you believe this garbage.

 

[residentialguy]

Whenever Sandy posts, popcorn stocks go up!

 

[Terrel L. Shields]

It had 360 degree views of the largest natural lake in California on one side and a beautiful farming valley on the other side.

Then the residual goes to the land regardless what someone supposedly "paid" for it...or that a lot nearby without that view, sold for $100,000. It's not EP.
[URL]http://www.biggerpockets.com/renewsblog/2009/10/02/developing-real-estate-price-land-profit/[/URL]

The land residual method is a calculation that takes the highest and best use of a particular piece of property and subtracts out the total cost of development to arrive at the residual value: the land value.

They go on to warn that "comparable sales" is dangerous territory when valuing the potential of development.

If you come up with a "negative" land value, then the HBU has been violated. The HBU is NOT what is on the site now. A bare site has some value, little as it may be and its HBU may be for recreation, conservation, or simply as "space".

 

[SANDY]

Whenever Sandy posts, popcorn stocks go up!

Whenever you post realtors throw a party!

 

[CANative]

Why do you have to always be so unpleasant and confrontational?

You're trying to get a handle on depreciation in the cost approach. In this case external obsolesence caused by market conditions. It's correct to use the term "economic obsolesence" for this type of depreciation but it's counter-productive to argue that economic obsolesence is somehow different than external obsolesence.

 

[ctapraser]

Looking for a quick way to estimate it without having to do full blown market study or statistically significant analysis.

$500,000-$250,000=$250,000woohoo

 

[Terrel L. Shields]

external obsolescences are of 3 different forms

Locational
Environmental
Economic

Source: Mastering Real Estate Appraisal by Dennis Carr MAI, et al

Not that Sandy would believe me since I am part of the vast old white men network of certified appraisers who destroyed America. For $7 or so you can buy a used copy of the above text book, but Mr. Carr is probably an old white guy too....

 

[Marty Boone]

vacant lots aren't worth next to nothing. they are worth less than nothing.

when homes have burnt down and the insurance companies give out money to rebuild, the homeowners give the property to habitat for humanity and rebuild out of city limits.

Thanks for correcting my post. I will go back and review the 15+ appraisals that I have completed in the City of Harrisburg for HFH to see if I did them correctly. WTF?

 

[Terrel L. Shields]

give the property to habitat for humanity

Then it is worth at least your tax rate for the value placed in an appraisal.

Donate $15,000, 34% tax rate = $5,100 benefit is dollars not sent to Uncle Sam.

 

[SANDY]

external obsolescences are of 3 different forms

Locational
Environmental
Economic

Source: Mastering Real Estate Appraisal by Dennis Carr MAI, et al

Not that Sandy would believe me since I am part of the vast old white men network of certified appraisers who destroyed America. For $7 or so you can buy a used copy of the above text book, but Mr. Carr is probably an old white guy too....

Exactly! The thread topic was about ECONOMIC obsolescence not locational or environmental but as usual several went off on a tangent about the first two.