Is this a part of the form where there is no concrete guidance anywhere and appraisers are just checking it willy nilly? Seems so.
I don't see how you could tell much of anything with Google maps sometimes. In many rural areas where I appraise now most of the lots are 2.5 to 5 acres minimum and if you looked at google maps it would look like there is lots of land available for development, yet in reality there are very few vacant lots.
In new home subdivisions you can tell how much has been built up by counting lots.
And is there any concrete guidance as to what constitutes urban, suburban, and rural?
In a small town, is the downtown area urban?
In a small town, is the area outside of the downtown area suburban?
Is the urban growth boundary outside a small town rural or is is suburban?
Show me the concrete guidance as to what constitutes suburban, urban, or rural if it exists.
There's no concrete guidance that I'm aware of. There is a starting point in the Dictionary of Real Estate Finance, but even its definitions of the terms is ambiguous.
Except, perhaps, for its definition of "rural" although even it is couched in terms of what it isn't ("Pertaining to the country as opposed to urban or suburban...".) And, it does include agricultural use, slow growth and less than 25% developed.
As is obvious, people working in different areas are going to have different opinions about how this is to be reported. Ex. Doug, you mention "rural" as an area of tracts of 2.5 to 5 acres. For example, if I were appraising in a very lightly developed area ("neighborhood" or "market area") - few houses, a very wide range of parcel sizes, some hilly land, some wooded tracts - in which roads are paved, all utilities present except public sewer, and which is within a 10 minute drive of a Super WalMart and a 15 minute drive of a level 2 trauma hospital, I'd probably label it as "suburban". But, if the area was a large development of tracts of 2.5-5 acres were in a remote location, distant from neighborhood shopping and other supports, with electricity and telephone the only utilities available (wells and septic systems needed) I'd call it "rural" regardless of the density of development.
Your questions are good ones. It's probably prudent to be ready with an answer if the question comes up from someone having nothing better to do that quibble about your application of nebulous guidelines. There are probably some appraisers who include their meaning of those terms in one of their addenda that nobody ever reads - I haven't done so yet, and it hasn't been a problem, yet.
The worst problem I've ever had with a neighborhood description was when I described a lightly developed area with some agricultural use and great view as "bucolic" - the reviewer rejected the property because "we don't lend in that sort of area". (And "they" wonder why appraisers retreat to "typical" and "average".)
