Remaining Economic Life, What Say You?

[Digger88]

1. I have a hard time saying anything has an effective age under 10 years when the foundation, studs, layout (think functional) and other things are 80 years old.

2. It is not possible for a 14 year-old home to have an effective age of 7 if everything is original.

3. Eh, 10 might be reasonable if everything is new but still you have to consider functionality of 26 years ago vs. what would be built today.

1. if just the bones remain (and are obviously still good) why wouldnt you have a 10 yr eff age.

2. oh please. take your typical (in my market) condo dweller who basically just crashes at their pad and a 14 year old home could appear still reasonably new. and even be less than 7.

3. ok ill bite, what does functional utility have to do with effective age? if the question on p1 is to answer just "age" where does ** come into it. (lol)

 

[Michigan CG]

2. oh please. take your typical (in my market) condo dweller who basically just crashes at their pad and a 14 year old home could appear still reasonably new. and even be less than 7...............

I don't care if Jesus lived in it, the roof, mechanicals, windows, doors, plumbing and electric is all 14 years-old.

...........3. ok ill bite, what does functional utility have to do with effective age? if the question on p1 is to answer just "age" where does ** come into it. (lol)

26 years ago it was not a requirement to have a master suite or vaulted ceilings. 1.5 baths was sufficient. Part of the effective age could be attributed to the functionality. I will have to think about that a little more.

 

[Terrel L. Shields]

"effective age" incorporates all forms of obsolescence, and is a proxy for "age-condition" and merely "age", nor "condition"

 

[hastalavista]

Most residential appraisers (and I agree with this process) use a modified age/life method where effective age typical represents physical depreciation and then external and functional are identified separately. However, it can incorporate all forms of obsolescence which then results in a single-calculation of the depreciation. Either way is acceptable. If I were to review an appraisal on a GSE form-report and the appraisal said it is using age/life method and the effective age includes all forms of obsolescence, I'd give that report bonus points for understanding the concept.

 

[Donna Quixote]

Try watching Life After Man, gives a new perspective of remaining economic life.

 

[Tim The Enchanter]

Effective age is completely objective.
Just ask my crystal ball. Best appraisal tool ever.