New House Old Neighborhood

[David Riggs]

I have a house that was built in 1999 in an average neighborhood that the rest of the houses were built in early 80’s. Owners bought the only available lot and built on it. The average house in the neighborhood is about 20-25 years older. For the same size house the subjects neighborhood is going for about 120K.


Also there is a gated PUD next door (different neighborhood ) where the houses are called cottages, are much closer together and smaller.
Next door is the new (built from 1999 - 2003) PUD is going for 160K for about 600 – 1000 SF less.

Now a couple miles away is a new upscale neighborhood (built from 1998-2003) that is similar to the subject improvements and they are going for 175-200K for about the same size as the subject.

#1 My question is where is my comps?

If I use the similar neighborhood two miles away then my subject is not there. I believe that if someone wanted a new house then they would go to the new subdivision. Boiling it down the subject should be given a negative adjustment because of location.

#2 How does one calculate the adjustment?


How would you do it?

Thanks
david

 

[Tim Hicks (Texas)]

Your neighborhood is your neighborhood. If there are no other similar age homes in that neighborhood, then the subject may have the effective age of the typical homes from that neighborhood. You may make age or condition adjustments, but you will need to support them. Look for highly updated homes from the neighborhood or remodeled homes. Be very careful using comps of a similar age from a different neighborhood, because they are situated in a homogeneous neighborhood with other similar age homes. Now, you may notice no difference in value with regard to age in the different neighborhoods, then you may want to mix and match 4-6 comps to support any adjustments you may make.

 

[jeff samolinski]

Oh Oh Tim that second sentence is whacked!!!

 

[David Riggs]

Tim,

So you think I should compare houses 25 years old to a house that is 4 years from the same neighborhood?

I believe that the subject will bring more than the neighborhood but not as much as a similar house in a different neighborhood.

-david

 

[Pamela Crowley (Florida)]

Use at least 2 from the subject neighborhood that are older and 2 from the next nearest neighborhood that are most similar to the subject dwelling in age, size, construction.

Last time I had to do this kind, I think I had about 9 comps up on grid with a mix from both. Eventually, I was able to determine the location adjustment for the newer houses in the newer developments and the age adjustment for the comps in the subject project.

Nasty one!!!! Charge extra!

 

[Tim Hicks (Texas)]

When a person decides to sell the the only four year old home in a 30 year old neighborhood, what are prospective buyers going to think? They may or may not be willing to pay more than similar size 30 year old home. What would be the market reaction? We see this from time to time in some of our older neighborhoods. Sometimes the home sells for the same as the the older remodeled homes. Sometimes the buyer is willing to pay a little more. Much of it has to do with the appeal of the neighborhood. Why are there no other similar age homes? Was this one vacant lot that never got filled? Was the older home torn down or burned to the ground? Is the quality of the home better, equal or less than the other homes in the neighborhood. Is this the start of a trend? There are many questions that need to be asked, but really if it is just a newer home in an older addition, would you be willing to pay more than a 30 year old remodeled home from the same addition? I would not buy it because I know all these questions. However, hypothetically, if a son built his new home to be close to his mommy, then it has more sentimental value to him, but may not have value to others.