CHICAGO (Nov. 22, 2010) – Residential lots with a view sell at higher prices even when they are not overlooking water or a golf course, according to the cover article in The Appraisal Journal’s Fall issue, published this week.
The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest professional association of real estate appraisers. The materials presented in the publication represent the opinions and views of the authors and not necessarily those of the Appraisal Institute.
“The Impact of a View on the Value of Vacant Residential Lots,” by R. M. Potgieter and C. E. Cloete, looks at how a view affects the sale price of undeveloped residential lots. The authors studied six residential neighborhoods by dividing each one into sections at lower and higher elevations. In all the neighborhoods, the lots in the section with a higher elevation offering a view commanded significantly higher prices. The lots with the views had an average sale price 36 percent higher than similar lots at lower elevations in the same neighborhood. The study also found that the lots with a view on average were 18 percent higher in terms of price per square meter. The area examined in the study is located in Tshwane, South Africa.
Previous studies on the price effect of views have focused on homes with views of amenities such as water and golf courses. The study reported in the Journal is significant because no amenities were present and because the lots were undeveloped, so that the presence of a premium home was not a factor.
Read “The Impact of a View on the Value of Vacant Residential Lots” in the Fall 2010 issue of The Appraisal Journal at The Impact of a View on the Value of Vacant Residential Lots.
Other articles in The Appraisal Journal’s Fall 2010 issue:
In “Appraising Low-Income Housing Tax Credit Real Estate,” by Kenneth N. Alford, MAI, and David C. Wellsandt, the authors look at low-income housing projects and how the tax credits and government controls for these residential developments may affect market value and consequently need to be accounted for in appraisals.
“Real Estate Appraisers and the Revised Tax Preparer Penalty Statute,” by Raymond Placid, J.D., CPA, H. Wayne Cecil, PhD, CPA, and H. Shelton Weeks, Ph.D., examines recent changes in the Internal Revenue Code that may extend tax preparer liability to individuals who perform appraisals that impact a federal tax return. Because of the new provision, real property appraisers who perform assignments that impact a tax return could be penalized if they do not comply with standards that govern tax return preparation. The scope of the tax preparer penalty statute has been broadened beyond income tax filings to include estate and gift tax returns, situations where appraisers are often involved.
“Integrating Geographic Information and Valuation Modeling for Real Estate,” by Mark R. Linné, MAI, SRA, and John Cirincione, SRA, looks at how a geographic information system (GIS) can be helpful in the valuation process by giving a spatial perspective on data. GIS systems give a visual presentation of data in a map-like format. This type of display provides insight into the data and helps identify new patterns in sales or market trends that might be less noticeable in a tabular or narrative presentation of the data. The article demonstrates how an appraiser using both GIS and statistical modeling can make more accurate and timely valuations.
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The Appraisal Institute is a global membership association of professional real estate appraisers, with more than 25,000 members and 91 chapters throughout the world. Its mission is to advance professionalism and ethics, global standards, methodologies, and practices through the professional development of property economics worldwide. Organized in 1932, the Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations. For more information regarding the Appraisal Institute, please visit www.appraisalinstitute.org.