Weight of view on appraisal value?

[RCA]

When I look at condo comps compared to subject, especially with similar gross area, one of main difference in price is the view. So I do more work and find out where the condos are located and figure out if views are inferior or superior.

Regarding condos in the SF Bay Area, the PPSF goes up as you go to higher floors - and this is more dramatic near the bottom and top levels. This is because, for the most part, aside from size, e.g. GLA, Bed and Bathroom count, the only difference between new units is often elevation. In San Francisco, it may be that only the very top floors provide a panoramic view of San Francisco - perhaps in all directions. The lower level may only offer a view of the homeless, shoppers, and traffic. The owners of the condo complexes usually start with certain assumptions and set the new prices according to those, invariably increasing them with floor level. After some time selling, they may fine-tune their original list prices. So, all of these condo units more or less have the exact locational GIS coordinates - and the buyer knows that by paying extra, he will get a better view. It's pretty much guaranteed. I always run MARS regression on condos to determine the elevation or floor level impact. But is this because of view, or is it noise pollution, or a status symbol?

With SFR properties, this price differential is not so well-defined.

 

[Surf Cat]

The lower level may only offer a view of the homeless, shoppers, and traffic

Lol....View; Adverse; Homeless

AMC; Appraiser to revise subjective view description.

Appraiser; View; Neutral; Outdoor Neighbor.

 

[Terrel L. Shields]

admitting that the view is a differential from the site value

no, it is an attribute of the site.

the land estimate in the cost approach is for vacant lot or site

which includes the contribution of the view -

What appraiser worth their salt, would NOT include a sale or do an analysis of such a view as described in order to gauge the market reaction?

Yes.

, I would pay a high premium for a million dollar view.

But does the view accrue to the site? Or, exist upon its own and only obtain "value" once a building is built on that site? I mean, does the view not exist when the lot is vacant, or only exist once an improvement is built?

 

[Fernando]

Regarding condos in the SF Bay Area, the PPSF goes up as you go to higher floors - and this is more dramatic near the bottom and top levels. This is because, for the most part, aside from size, e.g. GLA, Bed and Bathroom count, the only difference between new units is often elevation. In San Francisco, it may be that only the very top floors provide a panoramic view of San Francisco - perhaps in all directions. The lower level may only offer a view of the homeless, shoppers, and traffic. The owners of the condo complexes usually start with certain assumptions and set the new prices according to those, invariably increasing them with floor level. After some time selling, they may fine-tune their original list prices. So, all of these condo units more or less have the exact locational GIS coordinates - and the buyer knows that by paying extra, he will get a better view. It's pretty much guaranteed. I always run MARS regression on condos to determine the elevation or floor level impact. But is this because of view, or is it noise pollution, or a status symbol?

With SFR properties, this price differential is not so well-defined.

Condos are more complicated than just higher floor levels. In general, just like high rise hotels, I my room on higher floors to have good views. Hotels charge more for water views than view of office buildings. It's lovely taking a panoramic view rather than concrete building views. I try to be nice during check in to get good view rooms.
As for condos, I do more due diligence than my peers. I would look at the condo comps location because some locations are better If a condo building is near a freeway, those unit facing the auto noise sell less than on other side further from freeway noise. Courtyard views superior than street views. Even apartment units charge higher rents depending on the view and noise.
My daughter was given a good rental for an apartment unit but on further inspection, the unit was above a fried chicken restaurant. Not good with more pedestrian influence and the chicken smell.

 

[Fernando]

There is this hilly city in Bay Area which I find very hard to appraise. I dread appraising there or I charge a high premium.
The sales price sometimes doesn't make sense. I have to drive by many comps to see if they're similar to topography, land useability, curb appeal, and views.
If not, using wrong comps can have higher or lower appraised value than it should.

 

[RCA]

There is this hilly city in Bay Area which I find very hard to appraise. I dread appraising there or I charge a high premium.
The sales price sometimes doesn't make sense. I have to drive by many comps to see if they're similar to topography, land useability, curb appeal, and views.
If not, using wrong comps can have higher or lower appraised value than it should.

The SF Bay Area presents a complex real estate market, particularly when compared to the more uniform market of The Woodlands/Spring TX and many other areas of the Texas Triangle. The houses in the Bay Area are aging, leading to more updates. However, the Woodlands/Spring TX area remains relatively consistent or conforming in its housing stock.

The traffic is horrendous now compared to 10-12 years ago. Ft. Worth and Dallas are a nightmare for someone from Cal, new to the area, to navigate. The turn-off signs are terrible. You have to get into a habit of sticking to what you, in your best judgment, think is the central lane, after you pass a sign with your desired destination before a lane switch - until you hopefully reach the last lane switch with a sign with your destination, telling you to make the final lane change and exit on to the final highway. It's nerve-racking. You will feel lucky if you make it to the right road in one try.

https://kinder.rice.edu/urbanedge/texas-triangle-rising-megaregion-unlike-all-others

16-lane highway near the little town of Woodlands, TX. Jammed at 3:30 PM on a Thursday.

But further to the south in Houston, we have a record:

"The highway in the United States with the most lanes at any single location is generally considered to be the Katy Freeway (Interstate 10) in Houston, Texas.

At its widest point, the Katy Freeway expands to 26 lanes. This occurs between State Highway 6 and Beltway 8. The 26 lanes include:

6 main lanes in each direction
4 feeder road lanes in each direction
2 managed lanes (HOV/toll) in each direction

This massive width was the result of an expansion project completed in 2008 to address severe traffic congestion in the rapidly growing Houston metropolitan area.

While there might be short stretches or merge areas on other highways that temporarily have more lanes, the Katy Freeway is widely recognized as having the most lanes over a significant distance.

It's worth noting that despite its impressive width, the Katy Freeway still experiences significant traffic congestion during peak hours, highlighting the complex relationship between road capacity and traffic demand in urban areas."

https://www.chron.com/neighborhood/katy/news/article/Bragging-rights-or-embarrassment-Katy-Freeway-at-6261429.php

 

[Fernando]

I'd been looking at states with no income state tax. Texas is one but the real estate taxes are too high. Seems to negate the tax benefits.
And Florida with it's hurricanes (and high insurance) doesn't look appealing.
The state I'm considering is Washington. Overall taxes low except for capital gains.

 

[Fernando]

While walking the dog, I noticed city planted trees along the path.
Right now trees are small but I can imagine in ten years, the tree branches will block the Bay views for the homes up the hill.
Don't know if the homeowners realize that but less views mean less value on their homes.
Their "million dollar views" no longer (or at least blocked) there.

 

[RCA]

I'd been looking at states with no income state tax. Texas is one but the real estate taxes are too high. Seems to negate the tax benefits.
And Florida with it's hurricanes (and high insurance) doesn't look appealing.
The state I'm considering is Washington. Overall taxes low except for capital gains.

Texas property tax rates are about 1.5%-3.5% and can be increased every year. If the increase is over 3.5% then I believe the voters can request a voter approval. Yet in a good area like the woodlands, a good house probably costs only 25%-35% of what it would in the SF Bay Area -- and it would be newer.

One problem I see with Texas is that it is growing so fast that once attractive areas like The Woodlands become so expensive that, for example, the once high-quality affordable restaurants you would find 5-10 years ago are closing down and moving further out - because the lease rates and property taxes (in particular local add-ons) have such a negative impact on profits. - OR restaurants increase prices to higher than SF Bay prices, or worst of all, reduce the quality of the product.

So, in general, new towns eventually suffer burnout from rapid growth, and new development areas continually pop up through a gradual outward expansion to the remaining vast areas of land that Texas has.

At a state-regional level, there appears to be very little long-term planning.

Of course, in this rather barren landscape with super-hot temperatures, it would be presumptuous to assume continued growth at current rates

 

[Fernando]

Texas property tax rates are about 1.5%-3.5% and can be increased every year. If the increase is over 3.5% then I believe the voters can request a voter approval. Yet in a good area like the woodlands, a good house probably costs only 25%-35% of what it would in the SF Bay Area -- and it would be newer.

One problem I see with Texas is that it is growing so fast that once attractive areas like The Woodlands become so expensive that, for example, the once high-quality affordable restaurants you would find 5-10 years ago are closing down and moving further out - because the lease rates and property taxes (in particular local add-ons) have such a negative impact on profits. - OR restaurants increase prices to higher than SF Bay prices, or worst of all, reduce the quality of the product.

So, in general, new towns eventually suffer burnout from rapid growth, and new development areas continually pop up through a gradual outward expansion to the remaining vast areas of land that Texas has.

At a state-regional level, there appears to be very little long-term planning.

Of course, in this rather barren landscape with super-hot temperatures, it would be presumptuous to assume continued growth at current rates

It's difficult to build in Bay Area unlike Texas - Drill, Drill, Drill and Build, Build, Build.
Texas has mass of buildable land.
Regulations and lack of land to build keep prices high in desirable high demand Bay Area.