Sensitivity Analysis For GLA

[Joe Flacco]

You are really going to take the sale of this vacant lot on a 6 lane section of the street without a shoulder and use it as a basis for the site value of the improved property fronting a four lane section with a shoulder?

I gotta tell you. You are making me lose respect for you.

 

[Joe Flacco]

4025 Willalee Avenue, Glendale 91214 says that it is 2018 construction on 5,614 SF lot. The property previously traded for $630,000 in 10/20/2017 and is a flat level lot. This is one of the only new construction I can find as a untrained user of zillow. Why is this tear down sale not a better indicator of site value than the 45 degree land sale?

 

[George Hatch]

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You are really going to take the sale of this vacant lot on a 6 lane section of the street without a shoulder and use it as a basis for the site value of the improved property fronting a four lane section with a shoulder?

I gotta tell you. You are making me lose respect for you.

These properties are a block away from each other and you're kidding yourself if you think their traffic influences are sufficiently different to be of effect on value. The sidewalks are in and utilities are at the street; look at the topo, the front 30ft of the site is nearly level.

Sure, there will be some additional grading costs - which I already addressed. Those costs will not amount to $400k, though.

 

[Joe Flacco]

These properties are a block away from each other and you're kidding yourself if you think their traffic influences are sufficiently different to be of effect on value. The sidewalks are in and utilities are at the street; look at the topo, the front 30ft of the site is nearly level.

Sure, there will be some additional grading costs - which I already addressed. Those costs will not amount to $400k, though.

I am just going to pretend that you are trying to argue for the sake of arguing and let this go. I don't believe that what you are demonstrating in this thread is the way you actually appraise properties. I do not believe that your opinion of site value for the house on the level lot would be $250,000 based on that 45 degree land sale that.

 

[George Hatch]

As for the property on Willalee, by any chance did you bother actually looking at that house? Does it *look* like it was built in 2018? Do you really think the $320k difference between the prior sale and the active correlate to the cost+profits for building a new 1870sf home?


They clearly remodeled the 1951 home and expanded it a little. No developer in their right mind would have built a house of less than 2500sf on that parcel.

 

[George Hatch]

I am just going to pretend that you are trying to argue for the sake of arguing and let this go. I don't believe that what you are demonstrating in this thread is the way you actually appraise properties. I do not believe that your opinion of site value for the house on the level lot would be $250,000 based on that 45 degree land sale that.

Like I asked you before, what's your exposure to site development costs like?

The buyers for a vacant land parcel are not homeowners, they're professional developers who know what they're doing. Do you really think the core value of the site at 3001 lies in the (more) level topo? Or would you consider the possibility that maybe the big factor is the location? As far as site development costs go, parts is parts. A land developer, who already has to grade a parcel in order to put a foundation on it, isn't going to blink twice because they have to spend another 2 days cutting that slope, or another week in building the retaining walls.

And BTW, I do think the sale at 3120 was a low sale in relation to the site attributes, but the property was marketed and sold through the MLS so that is a real transaction.

 

[Joe Flacco]

As for the property on Willalee, by any chance did you bother actually looking at that house? Does it *look* like it was built in 2018? They clearly remodeled the 1951 home and expanded it a little. No developer in their right mind would have built a house of less than 2500sf on that parcel.

Yes. It crossed my mind. They are a little bit similar looking but I don't have california MLS I am just looking at zillow. But seriously you have to be ****ing with me that your opinion of site value for 3001 N Verdugo Road is $250k.

 

[DTB]

George, of course your situation is local as all are. I have never seen that in Chicagoland and I'm curious as to what you attribute this phenomenon to? Restrictive building regs? That would impact site values negatively right? Then you would have improvement values a a greater portion of the total. A more typical situation IME.

Not doubting the data but having a hard time figuring out why it's that way.

 

[George Hatch]

So Central LA; SFR parcels sell at $100k-$150k and 90yr old SFRs of 700-900sf and in beater condition sell in excess of $300k; so in relation to their respective environment where are those structures in terms of their remaining economic life?

(and yes, Joe, those parcels are dead flat so you can't complain about the lack of grading costs doubling or tripling site values).

It's kind of like asking what adjustment costs would be different for a condo than for an SFR of similar age/size.

 

[DTB]

So Central LA; SFR parcels sell at $100k-$150k and 90yr old SFRs of 700-900sf and in beater condition sell in excess of $300k; so in relation to their respective environment where are those structures in terms of their remaining economic life?

(and yes, Joe, those parcels are dead flat so you can't complain about the lack of grading costs doubling or tripling site values).

It's kind of like asking what adjustment costs would be different for a condo than for an SFR of similar age/size.

In my market it was typically flipped. 300K lot, 425K total value.