Interstate affect marketability & value?

[Chad J. Houser]

Although I've been reviewing posts here for several months now, I've not really had reason to post. Alas, no more viewing from the stands.

I have a 1400 sf proposed in a sub/ural to rural area. Few sales exist, but enough to get the job done. Problem is this: the 210' by 210' site is about 150 to 200 yd from an interstate. It's a fact that I just can't get around not mentioning. I have no idea, though, how to address the economic obsolescence of the property due to the interstate. Not enough sales to really justify any location or view adjustment. I could put down my gut, but I don't really think an u.w. will accept the rationale: " 'cuz Chad said so..."; or will they?

Any suggestions? I'm still a little wet behind the ears, so any and all advice would be appreciated. I have an idea how to address this, but would prefer to hear the voice of experience first.

Thanks in advance.
Chad

 

[Ray Ohler]

ones to field without knowing the WHOLE story. You mentioned 150-200 yards (450-600 feet), which is a pretty considerable distance (probably about 2 blocks in Philadelphia, and I am assuming that is physically where the roadway lies). If the site was "abutting" the roadway I could see a possible external obsolescence concern. On the other hand, if the site doesn't abut the roadway and access to the interstate is closeby, it could be considered a POSITIVE factor.

 

[Chad J. Houser]

Ray,

Thanks for the reply. You're right in that the proximity could be a positive factor. And on the drive back to the office I wondered if that might not offeset any negative influence from 24/7 noise and possible fumes. And I guess that's really where I'm concerned. The road off of which this site sits is about 400 - 600 ft from the interstate, meaning the house will actually sit closer. The site also slopes down to the highway, and the land in between has very little ground cover to absorb the sound.

If this were in an urban area, where sites were sparse, I wouldn't give it as much consideration. This is a rural county,though, where land is pretty plentiful. There is very little residential growth here, so if someone wanted to purchase a site in a rural area like this, they have plenty to choose from. The owners got this, though, for free from a relative. So they don't have much of a choice for location. I also looked on the map. This road is about a mile long, parallels the interstate, and has maybe 10 other houses on it. The kicker: It's the only road like it (paralleling the interstate so closely) in the whole county (probably 20 - 25 miles worth of interstate).

I know what I'd like to do: go back and do a 5 year study. I don't think they want to wait three month for this appraisal though :wink: !

 

[Judy Whitehead (Florida)]

But guess what - the research is the only way you have to determine if there is an adverse effect on marketability. Pairing sales abutting the expressway and those that do not. When I first started, I had an assignment that backed up to a shopping center (a grocery store directly behind) and I could hear the garbage trucks banging around emptying the garbage. I mentioned that it adjoined a shopping center and of course immediately had the underwriter jumping on my back with high heels on wanting to know if it affected the value - positively or negatively. I did some research (which was inconclusive) and decided that I could only make the comment that it did not appear to negatively affect marketability. In other words, some people (elderly) would find it handy to walk to the grocery store.

 

[Farm Gal]

Chad:

Despite all other factors in our market there are a few home with similar proximities in the mid to upper end of market range, with few comps and infrequent sales, we agonized over this issue around here fairly recently.
We came to a statistically supportable conclusion that on these specific homes, it really did not adversely affect the property. Confidence level was lousy but the numbers worked!

These homes were also in fairly close proximity with no trees or significant ground cover for noise absorbtion. Interestingly, the sloped hill above the interstate seems to 'bounce' much of the noise in the opposite direction! The occasional jake brakes (this was near a mild grade/offramp area many truckers did not expect) did come through the windows, but regular traffic noise was muted and not terribly obtrusive.

Direct view over the interstate to some buyers means 'somebody else mows and I don't look into my neighbors windows'. Some would absolutely not consider that property but would buy the home on the opposite side of the street with equal road noise... and the there are those who do not want to know there is a freeway in the vicinity (but want to live pretty close to the offramp for access

How busy is the interstate, how much noise does it really produce during the hours a person woould be at home, and how much traffic noise came through the Good/average/lousy windows when you were there...?

Sometimes you are being asked to solve for your opinion of value... "all things considered, there may not be a specifically quantifiable adjustment, but in your/my opinion the subject would sell at the top/middle/bottom of the adjusted range due to proximity to the freeway." and handle it in the summary/value conclusion analysis!!

 

[Rlong]

I agree (with everyone m/l). I have done rather thorough reseach for a development land appraisal. They intended to put in mid to high priced homes. I completely expected to find moderate to substantial market resistance. I drove up and down the highway (Interstate) taking note of existing and ongoing developments and tracked sales, talked to brokers. I was not able to PROVE much differentiation. But as Lee Ann stated, I did consider the location when adjusting to my comparable lot sales (probably used 7-8 comparable developments, lots of lots). This was several years ago and more and more developments are cropping up along I-25, I have to admit I didn't expect it.

Another intersting note was that on two different visits I heard from barely any noise to "substantial" road noise, I geuss atributable to wind, humidity, etc.. I don't remember what BS I put in the appraisal about this information, but I did try to honestly describe it. The homes were to be constructed about 700 feet off the highway and further as I recall.

 

[Chad J. Houser]

Thanks to all for your input. I'm glad to know that I wasn't pulling my hair for nothing.

Just FYI, I ended up making a statement re: lack of sales data and that 2 of my three comps were near an industrial park with heavy truck traffic, and so had comparable positive/negative features.

We'll see how that flies

 

[Don Clark]

8)

Chad:

I live in an area where there are many interstate highways, connectors, clover leafs, and most are seperated from adjoining areas by what I call "Chia Pet" walls. That is the concrete/masonry buffer walls intended to cut down on noise. Personally, I would rather hear the noise than see those walls. Looks like sing sing prison, and after a few months/years stuff starts growing out of them, just like the Chia Pet gifst people give other people they don't like for christmas. In many years of appraising homes near those things(we have one built in the 1970's) I have never been able to determine any difference in sales adjacent to the interstates with or without the walls as compared to homes well away from the interstate. We also have a lot of Jet noise. We have 2 Naval Air Stations, 1 Air Force Base, 1 international airport, and 1 regional airport. I report what noise zone a property is in based on the decibal rating for the area(yes, we have that mapped out), and if near a military base, if it is in a crash potential zone. Whether measured by closed comparable sales or not, I see no difference in value based on noise. However, I have not done a scientific study, just practical observation.

Don

 

[jt]

Chad, have completed several studies of this vary situation, and at first glances it appears property would sell for less being located next to an interstate highway. However, we could never prove that property located next to interstate highways had a diminution in value. Talk to those homeowners whose property is located adjacent to the interstate; you’ll find they are not bothered by the noise, if any; or they become acclimated to it. In my opinion, there is no measurable amount of value difference between residential dwellings located in close proximity to a highway/interstate vs those located far removed from such highway/interstate.