High voltage power line proximity

[Terrel L. Shields]

People care when the line is not there and then its added.

NIMBY at work. Ditto oil wells. People in the mountains have sued because they could SEE a rig drilling a mile away across the valley. They lost, of course, but were flabbergasted to learn that the BLM manages minerals under US lands and old homestead act land after about 1950 retained the mineral rights for the government.

 

[TerryRohrer]

I had one a few years ago in a very suburban area. I found a nearby sub that was bordered with a similar PL easement with lots of recent sales and I was able to extract a very supportable adjustment, both for view of just the PL (2%) and for view/proximity of a tower (4%).

Slicing pretty thinly there, in my opinion. I regularly see such differences without an easy culprit/amenity to blame.

My subject had 3 price reductions from $495k to $425K with 155 DOM (vs ~30 or less) and a SP of $410k. This was in a very active, rising market so that right there tells you something.

That is was over priced, for sure!

 

[Fernando]

When my in-laws bought a new home not yet built in a new subdivision, they saw the anticipated layout, style, etc.
After it was built, I noticed an electrical box near their front yard. Newer subdivisions have underground lines.
Not happy that the box was near their home. I never said anything about the box to them.

 

[Tim Hicks (Texas)]

Surely there has to be some sales that back to power lines. Even if you have to go back in time. Typically, I pull up the MLS sales map and follow the same power lines and if I come up with nothing I look for the others (there is never just one).

The funny thing is when the real estate market is booming and there are fewer listings, no adjustment can be supported for adverse location. However, in the slower real estate market times adverse location can be supported for some reason.

 

[Fernando]

When I have a subject backing to a freeway, I try to use as many comps on that street but only if back backs against freeway.
The homes on the other side "further" away from freeway sell higher.
Try to use comps on same street with same questionable external observations and no need to adjust as much.

 

[Joe Flacco]

Best way to find properties adjacent to it is to use the MLS map and click on the lots one by one that are adjacent to the power lines.

 

[Surf Cat]

but if I cannot prove an adjustment, how should I handle this?

I would track the history of sales of the subject property and compare them to the sales at those times to see if there's a difference in Market reaction.

I would also do what Mr Hicks advised in post number 14. Go back in time of the sales that backed to this power line easement and compare those sales to the interior sales which transpired at those times to see if there was a difference. Good luck.

 

[Fernando]

I would track the history of sales of the subject property and compare them to the sales at those times to see if there's a difference in Market reaction.

I would also do what Mr Hicks advised in post number 14. Go back in time of the sales that backed to this power line easement and compare those sales to the interior sales which transpired at those times to see if there was a difference. Good luck.

I forgot about that. When desperate that's the next best thing to do. It gives you general idea how much to adjust.
I hope other appraisers do this also comparing subject's sale at time of sale to comps at that time.
Surf Cat, I forgot you're a good appraiser.

 

[Tim Hicks (Texas)]

You would have got lucky if your assignment would have been here. Five sales and one listing backing to the power lines. Of course, we never get that assignment.



And a gas well to boot.

 

[Tom4value]

I have a subject property which abuts a high voltage power line easement. There is a tree buffer, but the lines are visible. I have searched back two years for sales abutting similar power lines with no results. I used google earth to track these particular lines, pulled up any home in tax records in similar proximity to the lines and came up empty, no recent sales. So, a matched pair analysis is not possible. Now what? Clearly there would be an impact on marketability, but if I cannot prove an adjustment, how should I handle this?

You “searched back two years with no results”. Does this mean you looked only for comparables of the subject property? My guess is yes. Now just look for sales that abut power lines. I am sure you will find some. This is not that weird of a situation.

Now let’s say you found one that sold 3 years ago, across town or even a different town. The property is not comparable to yours at all. No problem! What you do is compare that property to sales from 3 years ago that are comparable to THAT property but don’t abut power lines. You then derive an adjustment for the proximity…..or maybe there isn’t!

Let’s assume you did. If these properties and/or the market are not similar to your property, the best way is to change the adjustment from a dollar amount to a percentage that you can apply to your comps. Why? Say that your sales that you used for the adjustment are in the $200,000 range but your subject is in the $500,000 range. A $20,000 adjustment to your comps would be too small but a $50,000 adjustment (10%) would be more reasonable. Of course, you explain everything you did in your comments.
Hope this helps!