In ALL of my examples you are implying that ALL of the market participants are idiots. This might be true on occasion but the fact is that these scenarios are very common. To take it a step further you are coming into MY neighborhood (where I am also a licensed salesperson) on a property that I was PERSONALLY in contract on (having bought/sold and flipped multiple properties over the years) and saying that I am an idiot along with everyone else. This all goes back (like Glen said) to the arrogance of appraisers who refuse to listen to the market but would rather dictate to the market from a textbook, and a big part of why appraisers are going to be replaced. I would sum up my 17 years of appraisal experience (which also includes working on the lender side with a direct phone line to Fannie Mae) as "the appraiser's job is to reflect the market" and you are absolutely blowing it, which is why I feel so compelled to keep commenting here.
1. If the sellers could have gotten 25% more in these cases, then why didn't a smarter buyer like you ever step forward for arbitrage and profit? The list price is irrelevant, a buyer may bid whatever they see fit, properties regularly sell for well above asking price. None of these appraisals had comps that pointed to undervaluation. In most cases these parcels have been combined under one use for decades and transferred like this multiple times, so you are implying that ALL of those buyers and sellers and their brokers and agents over the years were idiots for not cashing in the second parcel.
2. If the HBU is to develop the second parcel, why are these parcels STILL vacant when you drive by? Surely in all these decades, someone must have pointed out to the owner what a moron they are?
Until you can answer these two questions, the MARKET says you are WRONG.
You keep conflating the odd sale here and there with representing the entire market. I think that's a mistake. I mean, that kind of reaction certainly *can* be typical for a given market, but you saying it's invariably typical for each of these markets might not pan out for you.
I'm betting that if I had actually put more time and effort into looking at land sales in Charmichael over the last 5 years I'd find more examples of lots being sold off separately than together. Now I don't know that's the case because I haven't actually done that analysis, but then again, neither did you. You obviously didn't even look for land sales in the first place, so just on that basis I've already put more effort into supporting my opinion that you have.
You found several examples scattered all over of the one kind of reaction, but did you even look for examples of the other reaction? I know you didn't, just like I know you didn't look for the retail value on that lot before posting your example. I understand that we tend to find what we're looking for, and we tend to miss what we're not looking for.
One advantage in this discussion that it looks like I have over you is that I actually do a lot of land appraisals. I have 2 of them (different clients) coming up next week, one being a 4-lot assemblage of finished SFR lots in an infil location, and the other being a parcel out in the sticks that's zoned for up to 100 SFRs. And I always look at the sales history of these properties and every one of the potential comparables that I'm even considering. So on that basis I am confident that I've seen things in these transactions over the years that you would never even think to look for.
One way I was able to find land sales in that area was that I maintain a subscription to a public records database (and assessor maps) that covers the entire state, so I'm not limited by my MLS subscription in where I'm able to look for that kind of info. I never even bother with Zillow.
Now to your point - if and when its *most* buyers in a given situation acting that way
then we obviously do that regardless of what's theoretically possible. And sure, it's time consuming to go through all the sales histories for all the listings in the last 5 years to see if any of them were previously held under the same ownership as the adjacent property. But then again, when it comes to using some due diligence something is always better than nothing.
You mentioned other examples, which from past experience I have also seen. But what do you think I'm going to find when I dig into those transactions and the markets in which they occurred? I may find some sellers who just threw their hands up and sold the group for pure expediency of it, but I'm also going to find situations where those lots weren't worth much to begin with or are in markets where it would take to long to sell them all off or other factors that aren't universal in all markets and all locales to the house+extra situation we're discussing here.
My point in the whole discussion is that the process starts at what is possible and eliminates the less likely alternatives as we go. It doesn't start with an outcome or a desired outcome and work backwards until it fits. That's no different that starting with a contract price and finding comps to support it.
The conclusion occurs *after* the empirical analysis, not in lieu of it.
