Neighborhood and market area description:
Subject is located in the small, unincorporated community of Navarro near the western boundaries of the Anderson Valley region of Mendocino County. Sprawling rural area where various communities are separated by large tracts of undeveloped land or farms and ranches. Neighborhood boundaries are not distinct and might simply be described as 1 mile north and south of Highway 128, west of Gschwend Road and east of Flynn Creek Road. The market area includes the entire Anderson Valley region.
The following is a brief historical description of Navarro from Wikipedia:
"Navarro (formerly known as Wendling) is an unincorporated community in Mendocino County. It is located 18 miles (29*km) west of Ukiah, at an elevation of 269 feet (82 m). It may be reached viaCA State Route 128, which connects it to the Pacific coast to the west and to the Anderson Valley to the southeast.
A former town of approximately 1000 people named Navarro was founded in the 1860s, located approximately 14 miles to the west of the present town, at the mouth of the Navarro River in what is now Navarro River Redwoods State Park A post office opened there in 1867. In 1902, the mill at the mouth of the river burned down, and the post office closed. A new mill was built in that year by G. C. Wendling on the north fork of the Navarro River, at the present location of Navarro, and in 1905 the town of Wendling was founded around the mill; a post office was opened there in 1914. However, in 1916 the Wendling mill was bought by the Navarro Lumber Company, at which point Wendling became known as Navarro Mill or more simply Navarro. To reduce confusion, the dwindling seaside town of Navarro became known as Old Navarro, Navarro Ridge, or Navarro-by-the-sea."
The Anderson Valley is located in Southern Mendocino County along State Highway 128. The eastern boundary begins approximately 12 road miles+- west of the City of Cloverdale, in Sonoma County, and extends along Route 128 to a few miles west of the community of Navarro. This scenic region is rural in nature and features large tracts of redwood timberlands, cattle ranches, vineyards, orchards and lumber mills. There are a number of well known wineries, tasting rooms, bed and breakfst inns and roadside businesses. Mountainous to gently rolling topography and a temperate climate. Boonville is the most developed community and features a community airstrip, grade schools and local shopping. Boonville and Philo are poupular tourist destinations or stop overs on the way to the Mendocino coastal area. Yorkville consists of a small community convenience and sundry store, a diner and a post office. The Yorkville Apellation is known for very high quality wine vineyards. Very limited employment in the Anderson Valley and most residents are self employed, work locally in the agricultural, tourist or service industries, or commute to employment in Cloverdale or Ukiah (the county seat of local government with a population of about 15,000), about 30-45 minutes distant. Many residential properties serve as weekend or vacation homes. Major employment centers located in the metropolitan regions of Sonoma County, such as Santa Rosa, Windsor and Healdsburg. San Francisco is approximately 3 hours southeast. Residential properties vary widely in design, age, quality, condition and amenities. Most properties in this area have lot sizes between 1 and 40 acres, with some properties well over 40 acres. Several ranches and farms exceed 2,000 acres. Subject's lot size is one of the smaller tracts.
Market conditions:
The residential market in The Anderson Valley has remained remarkably stable throught the housing and economic crises of the last five years. Most pricing has changed little, if at all, with the exception of residential properties at the highest ranges of sale prices, $1,000,000 to $2,500,000. Using BAREIS MLS and data sources such as FNC, Realist and NDC, as well as interviewing the local Realtors® who have worked in this region for many years, most are of the same opinion. Little change except for the high value properties which typically consist of very large homes on large tracts of land (over 40 acres) and which may include vineyards. This is especially true for manufactured homes and other factory building housing. The sale price range of $175,000 to about $250,000 has been consistent since about 2004 based on research and my own experience in having been an active appraiser in this region through the period.
This stability can be attributable, in my opinion, to the rural and remote nature of this region where market activity consists primarily of those who have lived and worked in the area for generations as opposed to those who wish to relocate from outside areas. Those properties which appeal to buyers from other areas typically represent the high to very high price ranges of luxury properties on large tracts of land, those of which have seen downward pricing or long periods of marketing time over the last several years.
Description of subject property:
The appraiser visited the site on October 5, 2013 and made visual observations of the exterior and interior of the improvements and observed and made notations of the site. The property is located at the intersection of State Highway 128 and Wendling Soda Creek Road. The lot is gently sloping away from both streets with a level front yard. The septic tank and leach field is believed to be in the front yard area. No signs of septic problems. The lot is fenced partially with wood fencing and partially with wire fencing. Improvements consist of an average quality (Skyline) manufactured home installed on a permanent foundation system. There are large covered decks at the front and rear of the residence. Condition of the decking is average. The exterior improvements appeared to be adequately maintained with no signs of damage or undue wear. Roofing appears to be original. The interior was in average to good condition with newer wood laminate floor coverings throughout the home with the exception of the bathrooms which were vinyl. No modifications to the home. No damage and only normal wear which occurs during occupancy. In addition to the manufactured home there is a 10' x 12' storage building with unfinished interior. Public electrical service to the site. Domestic water is from a shared well system. This well is locted about 100 yards from the subject site on a nearby parcel. Per the shared well agreement, four properties (including the subject) are served by this well. The agreement seems to be well written and provides for servicing the well, water quality inspection if required, and prohibitions from other uses other than domestic potable water and from hookups from other properties. From the appraisers experience it does not appear that a well could be developed on the subject site due to size of the lot in relation to the location of the septic system. It is my opion that shared wells with use and maintenance agreements to not adversely impact the value or marketability.
Site Value Opinion:
As stated, sales of land tracts less than 1 acre are exceedingly rare in rural Anderson Valley. Only one sale was found in BAREIS MLS going back 10 years. 575 Wenling St., Navarro, CA, AP#026-150-15-00, Sale price $40,000, sale date 10/10/2008, Doc.#14436. This property is a small lot in Navarro near the Navarro convenience store, about a mile from the subject. BAREIS MLS #20804914, sold 10/10/2008 for $40,000. MLS information is incorrect in listing the property as being 0.2 acres (or 8,700 sf). Property records from the County and Realist.com show the lot size to be 4,252 square feet with dimensions of about 31' x 135' (approximately.) Suggested usesfor this lot, as stated in the agent comments, are RV parking or camping suggesting it is not buildable or would be difficult to build on. No site improvements other than a hand dug well. The road to this lot is unpaved and rough. The sale price per square foot was $9.41. Applying the price per square foot to the subject's lot area of 7,841 square feet, the unadjusted value indication would be about $74,000. Adjustments for the subjects better location, better lot configuration, site improvements such as septic system and grading, would add another $25,000 to $35,000 and thus indicate a market value for the subject's site in the $100,000 to $110,000 range.
Extracting the improvements from the sale prices of comparable sales 1 through 3 results in a land residual of about $165,000 for comp 1, $228,000 for comp 2 and $180,000 for comp 3. These are all one acre or more with comp 2 having superior location and views.
Comments on the Sales Comparison Approach:
As noted, this is a very remote area in a rural County and there are few sales of any kind in any given year. Sales of manufactured homes are even fewer. I researched BAREIS MLS for the period of January 1, 2011 through the effective date of October 5, 2013 and found only 5 sales of mobile or manufactured homes. During the 12 months prior to the effective date there were only two sales of manufactured or mobile homes. I found one additional sale during the period after interviewing a local Realtor® who has been in the area for many years. This Realtor® owns many properties and buys and resells them as part of his business (North County Realty, Mike Shapiro, 707-895-3762.) I have used all three of these sales in the presentation in addition to the only current listing of a manufactured home in the region. Due to this extreme lack of sales it was not possible to use ideally similar properties in close proximity to the subject. Distances of 1 mile to 25 miles was unavoidable and adjustments for differences that exceed recommended guidelines and specific client guidelines was unavoidable. Adjustments for minor variances in improvement charactersitics such as bedroom count was not required and the limited market data would not support such adjustments. Going outside of the Anderson Valley to find manufactured home sales would not be a reliable method and finding sales of site built homes on small lots is very difficult and none were found in the last 12 months. See below for specific comments on each of the comparable sales.
Comparable sale 1: 4701 Monte Bloyd Rd, Philo: Located four or five miles easterly of the subject between Navarro and Philo. The appraiser could not get directly to the site due to a dilapidated bridge and signs warning to stay out and enter at own risk. This is an area notorious for illegal marijuana cultivation. See the appraiser photo and the addendum with MLS photos. 1977 manufactured home of about 1,000 square feet per MLS and listing agent, Michael Shapiro of North County Realty. 1.38 acre site with typical forest and hill views. This is the most recent sale of a manufactured home in Anderson Valley and closed in June 2013. Numerous adjustments for differences in site area, GLA, quality, and age/condition. This property could not be accessed for inspection from the steet for viewing. See photo addendum and additional MLS photos in that addendum. Large cash down payment with seller financing the balance at about market rate for manufactured housing. Adjusted market value indication of $233,000.
Comparable sale 2: 13175 Airport Rd., Boonville: Located in central Boonville about 13 miles east along Highway 128. Boonville is the largest and most developed community in the valley and this location is considered superior to others. This is a small development along the northern edge of the community airfield. The property backs to a creek with good views in addition to the interesting location and views afforded by the airfield. Very old pre-HUD mobile home required adjusting for market reaction to non-HUD factory construction. This sale required numerous adjustments exceeding recommended guidelines (gross adjustments of almost 80%.) This may seem excessive but it is common for this type of property in these remote areas due to lack of sales of more reasonably similar properties. Large cash down payment with seller financing the balance at about market rate for manufactured housing. Adjusted market value indication of $221,000.
Comparable sale 3: 26021 Sharon Meadow Ln., Yorkville: Located at the opposite end of the Anderson Valley near the small community of Yorkville. This is a small development of 1 to 2 acre lots subdivided by a local Realtor/Developer. Most of the half dozen or so houses are improved with manufactured homes. This property was not listed in the MLS and the appraiser identified it during the process of interview real estate agents and asking if they knew of any private, unlisted sales. Two acre site, level topography with average views of surrounding hills, somewhat inferior to subject views but difficult to quantify with available market data so no adjustment was made. Agent/Owner states the dwelling was built in the late 1990's, has three bedrooms (one bedroom has no closet by design which is typical in many manufactured homes of this class and which is the same configuration as the subject.) The bedroom with no closet has the same functionality as a bedroom with a closet and the market does not discern between the difference. The design was originally intended for homes that might be sited in subdivisions which did not allow three bedrooms due to sewer and/or water requirements. Agent also estimates size to be about 24 by 55 or 56 which would make it similar or the same as the subject. Inspection from street tends to corroborate that estimate. Only adjustments required were for the larger parcel size (adjustment takes slightly inferior view into account) and for basic wood step entries versus large covered porches. Per the agent/owner he purchased the home from a vineyard owners property who had passed away and then moved it to the site. The agent/owner financed the property at 8% which is typical for manufactured home interest rates. The sale price is a little less that expected but this is not unusual for this agent who buys and sells these types of properties often. Adjsuted market value indication of $208,500.
Comparable Listing 4: 19600 Appian Way, Navarro: This is the only active listing found in MLS as of the date of value. Property is located in the Rancho Navarro subdivision (a PUD of mostly 10 acre lots created in the 1960's be never fully built out.) The development is about a 4 miles (straight line) but more like 10 miles buy road. Sloping and somewhat rugged topography with forest views. Property could not be accessed for direct view due to private driveway. See appraiser and MLS photos in the addendum. 24 year old HUD code home of average quality and condition. Slightly larger in terms of GLA. An downward 5% adjustment for typical ratio of final sale price to listing price made in addition to a $100,000 downard adjustment for the 10 acre site. The adjustment was developed over long periods of experience in appraising property in the Rancho Navarro development. This property features a small site built storage building very simialr to the subject. The property has been listed on MLS for 92 days as of the date of value. Market value indication of $225,000 after adjustments.
Comparable Sale 5: 13100 Ornbaun Rd. This sale was added to the presentation of comparable sales after the original report was submitted at the request of client underwriting concerns regarding across the board adjustments for lot size differences. The appraiser did not inspect this property from the street for this assignment but has driven past it numerous times during other assignments located on Ornbaun Road. Very dated sale and the only sale listed in BAREIS MLS of a manufactured home on a lot size less than one acre over the last 10 years. Located in the community of Boonville near Comp 2 but not in the community airport subdivision. Ornbaun Road is in the hills just west of the airport where residential property does not have the same appeal. Older HUD manufactured home of lesser quality and inferior condition. Numerous interior photos included in the MLS (#20917778) showing old style wood panels versus drywall finish, and low ceiling height with plastic panels. Although the appraiser has stated that this market has been stable for many years this property sold during the depths of the housing crisis and it's reasonable to believe that pricing at that specific time was somewhat depressed. The adjusted market value indication, without making site size adjustments, is $215,000 which is within the range of smaller lot manufactured home sales.
BTW, in several small towns, when Wally World moves an old store to a new location on the other side of town, land prices fall near the old store and land values jump dramatically near the new one. And I have run regressions that indicate distance from WalMart is a value driver for land prices.
