Weight of view on appraisal value?

[George Hatch]

The developed areas of most of Southern Calif are mostly level or near level with no view amenity at all. But where there are hills and enough elevation to look down on other people, or when there is even a glimpse of the ocean if you're standing at the window in the bathroom then people go crazy over that. Except in San Diego County which has a lot of topography and where a blue water view might be visible from 20 miles away. Then the premiums aren't as high until you get within a few blocks of the ocean (or a lake or reservoir) and can see white water in the swell action. Supply and demand at play there. Lots of properties with the same view = less value attributable to that view.

When I talk about view amenities in a residential appraisal I like to characterize the distance and the degrees of that view as well as whether its available from a sitting position in the public zone of the house as opposed to only being visible from a standing position at a window. View from the rear fence or the 2nd floor deck or the roof doesn't count. There might not be much difference between a 15% view between trees @ 1/4 mile from the water vs a 30* view from the same location, but whether there is or isn't is worth considering.

 

[J Grant]

View is an amenity where one really needs to see the property or know the area/buildings. Especially with condos- the agent's description on MLS is ludicrous. Every unit has an "an amazing ocean view"- except half of them consist of a glimpse of the ocean from one corner of the terrace.

Takes a lot of looking at the photos, overhead maps, asking the agents, etc. - if one has already been in and appraised in the building, you can look at where the units line up in relation to being able to view the water directly, from the side, etc. Though listings at least might cite direct ocean views ( but even the half of them exaggerate -- seems like it is in the DNA of RE agents )

Some buyers are budget-conscious and/or do not care about views. Other buyers have the $ and the view is a key driver of their purchase decision. They want an ocean view they can afford it and any agent that shows them a property without an ocean view probably loses them as a client.

 

[George Hatch]

I *always* take my view photos through a window and from the inside of the residence.

 

[J Grant]

I meant the photos that are on the MLS listings for the comps. The photo on MLS shows a direct ocean view when the condo unit only has a glimpse of the ocean from the balcony.

True story - I appraised a condo unit, and it was apparent in the building that all the units faced the golf course. I was standing inside the unit with the agent who was gushing over the view. I politely reminded her that every unit in the building overlooked the golf course. To which she replied, "But this unit has a million-dollar view." I just smiled. The unit had the same view as the rest of them.

I used to sell RE, and I did okay, but I never got into that exaggerated mindset, which the top producing agents share.

 

[George Hatch]

I surf but I would never buy a home within walking distance of the ocean, and I don't care about views at all. However, as a professional appraiser I know how much people value views so I try to be real careful about them in my analyses and reporting.

 

[JTip]

I've never been able to adequately support a 'million dollar view'.

 

[Terrel L. Shields]

buyer for a vacant site is not the same buyer as for a house on a site.

Textbook - "Land is valued as if vacant and available for its highest and best use."

Land is worth exactly the same to the developer, the homeowner, the state. That by definition. "View" is part of the LAND with the exception of the 3-dimensional aspect of multistory condos. A simple lot has a fixed value (whether we accurately appraise it or not) and an identical lot without that same view will value differently. The problem is that view varies radically, even 2 lots within a few hundred feet have serious differences. And, therefore, "view" becomes an intangible that is extremely difficult to quantify. Ditto for the overall lot values.

My bottom-line is that the site is inseparable from the view with the condo exception which is impacted by the three-dimensional aspect. So, why delve into the intangible of the view and concentrate upon the lot value?

 

[J Grant]

Textbook - "Land is valued as if vacant and available for its highest and best use."

Land is worth exactly the same to the developer, the homeowner, the state. That by definition. "View" is part of the LAND with the exception of the 3-dimensional aspect of multistory condos. A simple lot has a fixed value (whether we accurately appraise it or not) and an identical lot without that same view will value differently. The problem is that view varies radically, even 2 lots within a few hundred feet have serious differences. And, therefore, "view" becomes an intangible that is extremely difficult to quantify. Ditto for the overall lot values.

My bottom-line is that the site is inseparable from the view with the condo exception which is impacted by the three-dimensional aspect. So, why delve into the intangible of the view and concentrate upon the lot value?

?? Land might be worth different amounts to different buyres . My point is that the buyer for a finished improvement on the lot is often different than a buyer for the land as a vacant.

We are not doing a land appraisal - ( though we can address the lot /site value in the cost approach.)

The appraisal assignment is for the improvement on the lot. Even in an SFR with a lot, the view contributes its own value - to the improvement as a package with the elot.

GSE loans want the SCA to rely on hard stop - including when we develop a cost approach.

 

[Terrel L. Shields]

?? Land might be worth different amounts to different buyres .

No. It has one value...by the very MV definition you oft quote.

We are not doing a land appraisal

Yes you are. The improvements are temporary. The land is permanent and you are valuing the worth of the rights to own that property.

 

[J Grant]

No. It has one value...by the very MV definition you oft quote.

Yes you are. The improvements are temporary. The land is permanent and you are valuing the worth of the rights to own that property.

We are valuing the way the market sees the rights to own the property—and they pay a heck of a different price for an improvement on the land vs. the vacant land. The improvement is expected to last 60-100 plus years, not temporary, as long as the HBU retains it.