Site varies by Flood Zone

[Skywalker]

Sometimes I'll have subject site size that is significantly larger than the other sites in neighborhood and its because the rear of the site is in a flood zone. When using sales comparables from the neighborhood with a smaller site I have made no adjustment and commented in the report saying something like 'portion of subject's site in flood zone therefore no adjustment given....etc'. Is this a reasonable explanation, assuming I've done the research and show no difference in value based on matched paired sales?

 

[alebrewer]

Technically, the adjustment - or lack thereof - should come from the market's reaction. That said: (1) I know you already knew that, and (2) I know that it is sometimes very challenging to quantify that.

It is very common, in hilly areas, to utilize 'useful site size' as an element of comparison for properties that have steep slopes, etc. Seems to me this would be a very similar situation...

 

[sputnam]

Technically, the adjustment - or lack thereof - should come from the market's reaction. That said: (1) I know you already knew that, and (2) I know that it is sometimes very challenging to quantify that.

It is very common, in hilly areas, to utilize 'useful site size' as an element of comparison for properties that have steep slopes, etc. Seems to me this would be a very similar situation...

Right. You aren't adjusting only for difference in site sizes but, for the market reaction to ALL of the differences between the comparable and the subject that are attributable to the site. One way to quantify market reaction to site differences is to use allocation and/or extraction on both the subject and the comparables and compare.

 

[KHS445]

In my narrative reports I have titled my site adjustment section of the grid as "Land Size/Value" and then comment on what bases I did or did not make any adjustment.

 

[Skywalker]

Grateful for the comments and feedback, happy weekend!

 

[Mark K]

I'll take your word for the 'matched pair - no difference in value" because maybe its that way in your area.

Around here, lots with the low-lying, potential flood area at the rear are desirable and more valuable than smaller lots in the same area. These lots often offer a privacy buffer and have a woods view vs. open, sunshine lots across the street. When sold for new houses, these lots ALWAYS come with a premium attached.

As far as the verbiage....I think if I was reviewing, I'd want to see some evidence in the addenda, i.e., the matched pairs that shows no difference.