Why are ranches and 2 stories not comparable?

[Pamela Crowley (Florida)]

Why are ranches and 2 stories not comparable?

What have the rest of you found in your markets that shows a variance? Those of you that have sold real estate, what have your heard/found out from buyers regarding the differences between a ranch and a 2 story?

 

[Tim Hicks (Texas)]

Not really an issue here. In TX we have to avoid the term "ranch" because it gets associated with homes on large acreage. If we use the term "ranch" on home with no acreage, they expect all the other comps to be called "ranch". Basically, two story homes cost less to build than one story homes of the same size in this area, but we have many instances where there is no variance in price. We use the term "traditional" over any other term to describe homes that are not specialty homes for this area (French, mediterranean, log, manufactured, contemporary, etc).

 

[Ken in Arkansas]

Obviously each market will exhibit it's own respsonses to the ranch versus two story feature. In our market we have many more one than two story homes. Market preference has gone in both directions, one study will indicate some level of variance in values, while a different study in a different time frame will indicate virtually no difference. The problem that I have goes back to the principle of substitution: Would the typical purchaser of the subject subject property (a one story) consider equally the purchase of a two story? As the population ages, will seniors equally embrace multi-level homes with one story home? It is unlikely, but still difficult to prove without challange, at least in my market.

 

[Wally Jones]

In our market, for the most part, there appears to be no significant way in which a two story improvement is considered more or less favorable than a one story. With the possible exception of a historical district downtown where it has become popular to restore older homes. In most subdivisions, the developers have a percentage they use to produce homes of varying size and in larger subdivisions they typically include a mix of one and two story homes. Some of the newer areas have been going to mostly two story homes in order to conserve lot space while offering more living area. I always look first to use like comparables, but sometimes it just isn't possible nor practical. I have yet to hear from a lender requesting more two story comps for a two story subject. Maybe I've just been lucky so far!

 

[Dee Dee]

The difference between a ranch and a two-story is a big issue in my area.
Ranches nearly always sell for significantly more than a multi-level home that is similar in square footage in my market area.

I always go the distance to try and find comps that have similar floor designs. Local lenders WILL call me on it if I don't.

My best guess as to why ranches are considered superior by typical buyers in my area is that they don't like having stairs to access the entire living area. Maybe it's the altitude here.....which will leave even the most physically fit a bit short on air if they have to trudge up and down steps.

 

[Phil Rice]

I have done appraisals in Denver and Boston, North Shore. In both areas, 80% (or more) of the homes are 2 story. If the subject is a 2 story, I will always use 2 story comps. I have never seen an appraisal of a 2 story that used a 1 story comp, it would only happen in some kind of special situation.

But what to do if I am appraising a ranch, and there are few if any 1 story comps available? A 3 bedroom, 6 room ranch might be 1,400 sq ft GLA. To get those same 6 rooms in a 2 story might be 1,600 sq ft GLA. The difference is the stairs, which account for about 100 sq ft on both the 1st and 2nd floor. I select comps and make GLA adjustments accordingly.

From the point of view of the buyer, what are the other differences? Ranch has no stairs to climb, as you get older, this matters more. 2 story has better curb appeal.

My take on the Denver and Boston market is that a 1 story property has superior market appeal to the similar 2 story property, but as a practical matter, it is very difficult to quantify and support an adjustment.

 

[Verne Hebert]

Here it is a marketability issue. Until about 1992, the predominate design was a split entry with no architectural style. As the migration from the urban areas with homes with "curb appeal" we began to see one+ and two story homes with more than two gable ends and one hip. As the percentage of retired people (and "older" people) became greater we began to see more single level homes because the "older" folks didn't like hiking the stairs.

In terms of market value, no measurable difference. I Comp the one to the two story when it is the "most relevant" data.

 

[Austin]

There is a good logical reason why ranchers and homes with upper stories are not comparable. Due to the different weight between cost per square foot numbers resulting from things like sharing the same roof, the ceiling of the 1st floor serving as the floor for the second floor, etc., that the $/sf numbers are not comparable. When the upper floor ranges from 1.2 to 2-story it really gets scrambled. There are ways of making them comparable but I don’t think anybody would be interested in hearing it. It doesn’t apply in areas of the country where the laws of science don’t apply. You guys will have to resort to using artistic methods.

 

[Ross (CO)]

We have "raised ranches" out here, if you want to sprinkle a little more nomenclature into the mix. Are they 2-story's which sank further into the ground but not so far as to bury their "garden-level" windows ?, or are they traditional ranches which got floated up out of the ground enough that the owner decided to create some windows later for those lower level rooms ? There is always the 2-story on a slab (or a crawlspace). Still comes back to there being two levels for living with a stairway flight linking the two levels, and an element of "bouyancy" as to what the builder did back when the house was constructed. Not uncommon to find the Realtor has misnamed the house in creating the listing.....or simply has a different word to call it. That's why we need to take closer scrutiny to actual sq.ftg and room distribution, per level, and proceed with the most-similar homes. I will easily insert my name for the design style in the report, even if that differs from the word used in the listing. If the agent wants to call it something else in their BPO, they are free to do so.

 

[larryhaskell]

In our area it typically depends on the square footage. When the square footage is in the 1200 to 2000 range it does make a difference. The 2 story is typically less desirable. As the square footage increases, it becomes far less important. Some buyers just like the design & appeal of a multi level home versus a single level. I believe it is true that as we get older, a single level home is just easier to live in. I know this would be true in my case. I get enough ups & downs measuring properties @ Lake Tahoe.