What comparables to use in a drought

[Vicki Galloway]

We are experiencing a drought here in South Carolina. Several lakes are down 4 feet to 15 feet from full pool. When appraising a home that once was lake front a year ago and now you see a dock in mud what comparbles do you use? Interior lots and make a positive adjustment or other lake front homes and make a negative adjustment (after checking to make sure they had water at time of the sale.) It could take several years to be back at full pool, or a couple of hurricanes moving through could bring it back next month. I know you must appraise "as is" today. I just wanted to know what comparables other appraisers would use.

 

[Restrain]

Had this happen here in the DFW area routinely. When the lakes are down, values drop for waterfront properties. Lakes fill up, values go up. You would use exactly what you would use otherwise, which is similar properties with similar lake frontage. You should be able to find a waterfront sale or listing to allow you to make any necessary time/water adjustments.

 

[Dennis J. Black ASA IFAS]

The property is still on the lake. Are not the other lakes also down? Those properties are still the most comparable.

 

[Flakey]

This has happened here before in the late 80's. The market did reflect these shallow sites vs deep water sites even after the lake came back up for awhile. Lot sales are helpful. Jocasse does not have enough sales to be helpful and Keowee is not low enough. If I were on Hartwell, I would try and stay with sales on that lake. Also, listings can be useful, especially if they have been on the market for awhile.

 

[Chris White]

If you are talking about Lake hartwell or Keowee then you need to be careful. These lakes have a lot of coves and all lake front lots are not equal....you need to find sales that have similar characteristics (ie . used to have water now dont.) There is a big difference on these lakes in the depth and view of the lake front lot.