Solar Panel Adjustment Lack of Data

[Jayjay25]

I have found that owned solar panels in starter homes are atypical and seem to be a superadequacy in my market. Most first time buyers here would rather spend the additional money on more house than a smaller electrical bill.

 

[Carnivore]

I have found that owned solar panels in starter homes are atypical and seem to be a superadequacy in my market. Most first time buyers here would rather spend the additional money on more house than a smaller electrical bill.

Same here in NC. Unlike the North East our property values are considerably lower. Common man in a small 1,000-1200 sft 5/6-3-2 is not going to spend 8k-12k for PV's. Our Electric Rates are very low. Especially peeps who live in the Country. They will pay money for more Car Storage or upgrading Interior or adding on. Hard to justify PV System on a $100,000-$130,000 house

The Push to raise Energy Cost of non-renewable's is really going to hurt the lower income levels. These people are really feeling the Higher Gasoline Prices.

I filled my SUV up today with High-Test. Took 15 Gallons at $4.00 per Gallon. $60 Bucks. Last year this time it would cost about $38-$40 dollars. I could have saved a little bit by driving 7 miles south of my house to South Carolina and got Gas at $3,70 a gallon.

 

[Tim The Enchanter]

Adjustment book says!

+$5150.

 

[shrubberyvaluation]

Adjustment book says!

+$5150.

Wouldn't surprise me. Typical buyers in this market use the same book!

 

[Tim The Enchanter]

5150 refers to the California law code for the temporary, involuntary psychiatric commitment of individuals who present a danger to themselves or others due to signs of mental illness. It has been more generally applied to people who are considered threateningly unstable or “crazy.”

Or Van Halen.

 

[J Grant]

Subject is a manufactured home in a community of manufactured homes (about 100 in the community). Manufactured homes are not common in the area and none are nearby except in this community. I did not find any sales with solar panels historically in the community and did not see any solar panels while inspecting comps from the street (of course they could be hidden). The solar panels are owned, no financing.

My gut tells me the market would value them somewhere between $0 and the savings of the life of the solar panels minus maintenance. Would it be reasonable to use paired sales data from non-manufactured homes in the area despite the lack of solar panels in this community. This community homes sells significantly less than other housing in the immediate area (due to being manufactured housing). Or would this not be reasonable due to the lack in the community? I imagine this would the best credible way I can derive an adjustment due to the lack of data in the community even if there could be differences due to different price points.

I looked at prior solar panel threads and could not find the answer to this. I did not agree with simply using cost or savings as it is not a reflection of the market. An informed buyer would want to pay less than their expected savings I would think. Of course there can be other motivations for those that want to be environmentally friendly.

It's a tough question, because one also has to consider, being that these are manufactured homes and sell significantly lower per your research than other area homes, are solar panels an overimproement for THIS subdivision? One clue is what upgrades do command value in that community ... you can as others suggested get a percent adjustment from a nearby community with solar , but then you still have to look at your subject community does it apply. Ask area RE agents as well. While any buyer would be happy to have savings in their electricity, how much upfront are they willing to pay....and if they pay more for the solar, does it leave them less in budget to pay for other features they might want. if there is no clear answer, you can opine the subject at high end of value and explain why.

 

[alebrewer]

you can defend a no adjustment based on no comparable data

I get what you're saying, but I disagree. Just because you have no recent data does not mean the market won't react positively or negatively to an attribute - and our job is to quantify the market's reaction, not just ignore a feature because we don't have recent data... that's kind of like saying, "I could find no sales with guest houses, thus I'm not giving the subject's guest house any contributory value."

 

[J Grant]

I get what you're saying, but I disagree. Just because you have no recent data does not mean the market won't react positively or negatively to an attribute - and our job is to quantify the market's reaction, not just ignore a feature because we don't have recent data... that's kind of like saying, "I could find no sales with guest houses, thus I'm not giving the subject's guest house any contributory value."

However, no data DOES indicate something in itself !! I can indicate lack of demand .

It is not rote data that is lacking, it is that no sales in same subdivision/similar price range subdivision with a feature ( in this case solar panels ) - if appraiser searched a few years back yields nothing, then it is probable that it is because home owners in subject subdivision did not value solar panels enough to add them. Because when enough homeowners value a feature, they add that feature, eventually some of the homes with that feature will hit the market as a sale.

Lack of sales found of houses with similar features can mean that feature is an over improvement or super adequacy for its market . ( due to lack of demand ) By contrast, a search in a higher price subdivision yields 4 houses sold with solar panels, meaning the superior subdivision has a demand, shown by at least some owners who valued solar panels enough to add them.

 

[alebrewer]

However, no data DOES indicate something in itself !! I can indicate lack of demand .

It can - or it can indicate that there are no recent sales with that particular feature... I know nothing of the OP's market, but in a very stable market where there is little turnover, it may be challenging to find sales with which to extract contributory value for a particular feature. Doesn't necessarily mean the market doesn't value that feature, though - although I agree that it could. Hence geographic competence... in my particular market, the existence of 'barndominiums' is quite common - yet there are very few sales of said beast at any given point in time. Doesn't mean the market doesn't value them, just means that - for whatever reason - they don't turn over very often...

It's been my experience that failing to give contributory value to a feature simply because a cursory review of data doesn't show any sales with that particular feature is attributable to laziness, and not the market's rejection of said feature.

 

[J Grant]

It can - or it can indicate that there are no recent sales with that particular feature... I know nothing of the OP's market, but in a very stable market where there is little turnover, it may be challenging to find sales with which to extract contributory value for a particular feature. Doesn't necessarily mean the market doesn't value that feature, though - although I agree that it could. Hence geographic competence... in my particular market, the existence of 'barndominiums' is quite common - yet there are very few sales of said beast at any given point in time. Doesn't mean the market doesn't value them, just means that - for whatever reason - they don't turn over very often...

It's been my experience that failing to give contributory value to a feature simply because a cursory review of data doesn't show any sales with that particular feature is attributable to laziness, and not the market's rejection of said feature.

Agree - geo competence becomes crucial...and imo these are the times to call and survey local RE agents who specialize in the subdivision ( their name will show up on a number of the MLS listings ). Though RE agents are not always reliable, in these situations their feedback usually is. Ask the RE agent - how many of your buyers ask for a house with solar panels ? ( none) vs in another assignment, How many of your buyers are looking for a barndominium ( a lot of buyers). That speaks to demand. Also ask the agents did they ever have a house with solar panels as a listing - etc.

A cursory review of data is not the same as a diligent search which can include asking RE agents. Not every search is limited to just the data. At some point though have to stop....when enough feedback emerges to conclude one way or another .

An oddball feature with no sales to use, or even with low demand but it was high cost and appraiser believes it would add some value....that feature can have a contributory value, but not as a line item....opine on the higher $ end of the range of value and explain that the solar panels was part of the reason to do so