Philadelphia New Construction

[Rocky777]

This may just be a rant but I am very concerned about how new construction is including basement finished areas within the GLA. Its to the point were it agents who list overall size correctly or post above/below grades sizes are at a huge disadvantage so over the past 5 years has lead to a trend of only posting GBA and calling it GLA. Once these homes leave the "New construction" market and join the resale market that 2700 Sqft row home that you paid top dollar for is only a 2025 sqft row home. I cringe every time I get a new construction in the city because in 5 years when they refinance someone is going to get really mad and I don't want to be in the warpath, but its the majority of work in the city.

Many agents say "Buyers today are more informed then ever because of the internet" but I think its more "Buyers today are more mislead then ever before because of the internet". Maybe its me and misreading my statistics that show a correlation between price and size, when I should be figuring out the 10%+ adjustment for difference in type of granite countertops or the difference between fixture colors.

 

[timd354]

This may just be a rant but I am very concerned about how new construction is including basement finished areas within the GLA. Its to the point were it agents who list overall size correctly or post above/below grades sizes are at a huge disadvantage so over the past 5 years has lead to a trend of only posting GBA and calling it GLA. Once these homes leave the "New construction" market and join the resale market that 2700 Sqft row home that you paid top dollar for is only a 2025 sqft row home. I cringe every time I get a new construction in the city because in 5 years when they refinance someone is going to get really mad and I don't want to be in the warpath, but its the majority of work in the city.

Many agents say "Buyers today are more informed then ever because of the internet" but I think its more "Buyers today are more mislead then ever before because of the internet". Maybe its me and misreading my statistics that show a correlation between price and size, when I should be figuring out the 10%+ adjustment for difference in type of granite countertops or the difference between fixture colors.

Is there some reason this presents a problem for you as the appraiser? With these city rowhouses, it should be pretty easy to correctly segregate out the basement area and report the correct GLA of the subject and the comps in your appraisal report.

 

[Rocky777]

Is there some reason this presents a problem for you as the appraiser? With these city rowhouses, it should be pretty easy to correctly segregate out the basement area and report the correct GLA of the subject and the comps in your appraisal report.

Yes and no, Most are legal non conforming and are not simple boxes and have Cut-ins and overhangs or the third story is smaller then the first 2 or have partial basements. Enough possible change to require looking at each sale and not something that can be done just looking at speadsheets. . Then their is the volume issue, 1000+ sales within the direct market area with a size variance under 10% is a common occurrence. You would think appraising in the city would be easy but it really is more difficult due the smaller variances. Calculating the added value of an extra bathroom is easy on the surface, going though each of the 200+ possible comparables checking each listings remarks to see if their extra bath is in the basement or above grade is annoying and tedious. I spend alot of time looking at spreadsheets, not afraid to run the numbers and do lots of regression, when variances get below the margin of error it gets hard.

 

[timd354]

Yes and no, Most are legal non conforming and are not simple boxes and have Cut-ins and overhangs or the third story is smaller then the first 2 or have partial basements. Enough possible change to require looking at each sale and not something that can be done just looking at speadsheets. . Then their is the volume issue, 1000+ sales within the direct market area with a size variance under 10% is a common occurrence. You would think appraising in the city would be easy but it really is more difficult due the smaller variances. Calculating the added value of an extra bathroom is easy on the surface, going though each of the 200+ possible comparables checking each listings remarks to see if their extra bath is in the basement or above grade is annoying and tedious. I spend alot of time looking at spreadsheets, not afraid to run the numbers and do lots of regression, when variances get below the margin of error it gets hard.

I used to appraise in both Baltimore and Washington, DC, so I know all about the issues involved with urban appraisals. I don't no what so hard about small variances, especially when your data show that they are within the margin of error....don't get caught up trying to adjust for such small variances in the sale comparison grid (i.e., making a $2,500 fireplace adjustment on a $400k appraisal or some such other nonsense).....these are the types of things you can address in your reconciliation.

 

[Rocky777]

I spent the first half of my career working in DC and Baltimore, and I get your point, but although there is very little difference in design/size/style I am dealing with very high variances in price. In Baltimore you could track price differences by block whereas these areas will have 4 completely renovated homes on the same street with over 150k difference in price, and the data indicates that fireplace adjustment is 45k+ and that's not right ether. MARIS held agents to a higher reporting standard so reviewing the data was easier, With less reporting standards in PA agents are gaming the system and sooner or later that error will need to correct itself.

 

[Salty]

This is exactly why those push button regression adjustment programs are useless. Yup, I see these GLA issue everywhere lately. In Philly, Delco, Chester County. The only way around it is do what I do. I send out my email template asking about GLA to both agents right away. By the time I need the info if I have not had a response I make the phone call. Of course 90% of the time the agents have no idea or say I am sure it included the basement. But then its up to me to somehow figure out how much of the reported GLA is basement. Occasionally I have received the actual appraisal from an agent. I have had to exclude good comps because I simply could not verify the GLA. The mix of housing stock made me uncomfortable guesstimating the true above grade GLA. I see this issue in the suburban areas as well in the Toll Bros type developments. Extracting basement sq ft in counties with little data is a pain. Some houses have bump-outs some do not. Some have the open family room, while others do not all within the same development. At times I just decline assignments because the headache of determining GLA is not worth it to me in terms of liability. Love it when you have a block with a new row home under contract for $600k, a vacant lot with garbage in it, 3 board-ups with dudes hanging on the front step, older homes for 125k, etc

 

[NJAPRAZE]

I do a lot of these. You need to separate realtor's creative "marketing" from your "appraising" ; call it what it is... if it's below-grade, then it's a finished basement & not above-grade GLA. Regarding reported data in MLS/assessment recs - TRUST yourself and your eyes. Don't be afraid to report "estimate" GLAs (for comps) - i.e. if by the same developer, appear to be similar model/layout, etc - based on what you actually measured for a subject.... just make sure you properly disclose.

Separately, not any better in the suburbs... as many assessors incorrectly include finished basement SF in the total reported assessed "GLA" -- for taxation/revenue purposes! Also misleading...

Ultimately - you have to be the "eyes and ears" for your clients, as this is what they're expecting, as well as guard against potential future liability by not correctly reporting etc.; it's a constant battle...