Negative Land Value?

[ExplainDNA]

Hi there,

Please, tell me I'm not crazy.

In old school Rockford, semi-busy street, burned out home to be demolished (but is still there), gotta do a land valuation. The city is ****ed the thing is still there as it is, the signs bear that out.

No (comparable) vacant land sales really, and most homes in this market, the good ones, can be had for $30,000 or less. Found one for $5,000 that *I* could actually live in without sacrificing my dignity. Sales for $1.00 can be found - with a house. Zoned R-1.

So, land really is worthless, yet there's the cost to demo and haul away. And probably an added asbestos cost, too boot.

If the above scenario is true, is then equally true that this land is less than worthless, that's it has a *negative* value to the typical investor, and that no one would want it even if were offered free? What could one possibly do to this lot, at this time?

That is my opinion, but was hoping to get one or two from my peers.

Thanks in advance,

Dave...

 

[Michigan CG]

We had this debate last winter.

http://appraisersforum.com/showthread.php?t=183606&highlight=negative

 

[ExplainDNA]

Okay, I get it, the argument was (as I understand it):

1. It *can* have a "negative value" to the owner.

2. It cannot have a negative value to the market, as they wouldn't then buy it. It would have, in effect, no value whatsoever.

So, that doesn't help. Both arguments make perfect sense depending on how you're looking at it.

Was there a *definitive* resolution to that whole thread that I missed?

Thanks,

Dave...

 

[ExplainDNA]

By the way, there is some outstanding thought in that thread, I'm going to take some time to digest all the good stuff that's there when time allows. Thanks, Tim.

Dave...

 

[Michigan CG]

.....Was there a *definitive* resolution to that whole thread that I missed?...............

I was right as normal. Just ask me. woohoo

 

[ExplainDNA]

If this was FacePal I'd give you a 'Like' for that..!!

Dave...

 

[Meandering]

Dave,

While you're contemplating residential land with possibly no market value, I am contemplating the same thing for industrial land, where the factories are now obsolute and the buildings are rotting into the ground. There seems to be no reuse, rehab or sales interests, some even have tax saving programs and no one is buying them.

Looking at all the data and wondering how long before enough office type jobs move overseas and we start to see the same thing with office buiildings in some areas.

I was at Harmon Cove in NJ not that long ago and the giant outlet mall was more than 3/4 vacant, not true of our outlet mall, but there are some pretty scary ghost buildings out there for sure. Harmon Cove is in a very large office and industrial park full of warehouses. Many had for sale and/or space available signs.

If jobs keep leaving this country, it's going to put a major hurt on commercial highest and best use. Especially if that type of land backs up to residential uses that are similarly going vacant with little to no sales and large inventories. Looks like there are lots of big questions that may be coming down the pike for many areas.

.

.

 

[ExplainDNA]

Marion - thanks for sharing.

As for me and my report? I used $0.00 as the final value, and felt real good about it, too. The client? Not so much. Said that, "Typically our client doesn't accept anything less than $1.00 on a report."

That is no joke. "Typically." Well Hell, never mind what they "typically" accept, the land is worthless, period. Accept THAT.

Also, I'm betting this one hits Brian's desk, and I may be in trouble, I can't say for sure. They demanded I put Marketing Time and Exposure Time in that report. I wouldn't do that (amongst other things, too), either. It just seemed logical that if something has no value that it therefore cannot be sold (at any price). If that is true, and I believe it to be the case in this instance, then marketing and exposure times have therefore become irrelevant. That is to say, had I placed either in my report it would have been misleading, and obviously applied to something OTHER than my Subject.

What will happen here is the same thing that happened to our comparables #1 and #2, the city of Rockford will 'buy' them for a recorded price of a $1.00 and raze the home on the taxpayers' dime. That's not 'market', and abundantly proves that land, at least this particular piece of it in Rockford, is completely and utterly worthless.

There, rip away, maybe I have it coming. And sorry for the complaint if that's what happens, Brian. I may have done wrong, but at the time it just seemed like the right thing to do...

Best,

Dave...