Comparable Market Analysis
I recently had a client interested in finding out how I valued property on Lake Osoyoos because all of the other agencies had priced the properties with no continuity. So I showed them the correct way to value properties on a specific body of water. This is how I do it, first I locate the three highest valued comparable sales. (Here are the highest sales as of 09/14/2008)
Comparable #1
Sale Price: $999,900.00
Sales Date: 07/15/2008
Improvement Sq Ft: 1622
Acreage: 0.08 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 75'
Comparable #2
Sale Price: $890,000.00
Sales Date: 06/06/2008
Improvement Sq Ft: No Improvements
Acreage: 0.50 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 140'
Comparable #3
Sale Price: $750,000.00
Sales Date: 07/16/2008
Improvement Sq Ft: No Improvements
Acreage: 0.16 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 72'
In this example here is a property we will value based on the above comparables:
Subject Property
Sale Price: To Be Determined Below
Sales Date: Not sold yet
Improvement Sq Ft: 3500
Acreage: 0.70 acres
Address: TBD
New Owner: "Alex"
Tax Parcel ID #TBD
Amount of Lakefront: 100'
New construction value on Lake Osoyoos is currently running $200.00 per square foot. I am assuming your property improvements have depreciated approximately 50%.
The depreciated value of the home separately would be: $350,000. (3500 sq ft home)
All other comparable properties have water and sewer so we won’t adjust for these improvements.
Comparable #1 Improvements: $324,400.00 No depreciation (brand new house) leaving Land value at $675,500.00
Comparable #2 Land Value: $890,000.00
Comparable #3 Land Value: $750,000.00
The first thing we do with valuing land is to give the non-lakefront portion of the land value. Based on comparable sales we would give the non-lakefront portion value at $125,000. per acre.
Comparable #1 Land Value Non-lakefront: $125,000.00 X .08 acres = $10,000.00 Then you would subtract $10,000. from $999,900.00 leaving $989,900.00 then subtract the improvement value (above) $324,400.00 equals $665,500. to calculate lakefront value. Then $665,500.00 divided by 75’ equates to $8873.33 per lineal foot.
Comparable #2 Land Value Non-lakefront: $125,000.00 X 0.50 = $62,500.00 Then you would subtract $62,500. from $890,000.00 leaving $827,500.00 to calculate lakefront value. Then $827,500.00 divided by 140’ equates to $5,910.71 per lineal foot.
Comparable #3 Land Value Non-lakefront: $125,000.00 X 0.16 = $20,000.00 Then you would subtract $20,000. from $750,000.00 leaving $730,000.00 to calculate lakefront value. Then $730,000.00 divided by 72’ equates to $10,138.88 per lineal foot.
Taking these three per-lineal-feet figures and adding them together then dividing them by three gives us an average per-lineal-foot figure.
The average per lineal foot price is $8307.64 based on these figures.
Now we reconstruct the subject property as follows:
Non Lakefront land value: $125,000. X .70 acres equals: $87,500.00 We have already established the improvement values at: $350,000.00 The per lineal lakefront value is $8307.64 per foot X 100’ equals $830,764.00 Leaving the actual Value based on Comparable sales in the last 6 months at: $1,268,264.40
I specialize in Lakefront sales and I would love to market your property for you, let me know if you would like to list your property! To see the properties I have sold in the last 3 years go to:
Ryan's Sales
To see the properties I currently am actively marketing go to:
Ryan's Listings
To see information on the lakes in our area go to:
The Lakes of Okanogan County
-Ryan
Comparable #1
Sale Price: $999,900.00
Sales Date: 07/15/2008
Improvement Sq Ft: 1622
Acreage: 0.08 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 75'
Comparable #2
Sale Price: $890,000.00
Sales Date: 06/06/2008
Improvement Sq Ft: No Improvements
Acreage: 0.50 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 140'
Comparable #3
Sale Price: $750,000.00
Sales Date: 07/16/2008
Improvement Sq Ft: No Improvements
Acreage: 0.16 acres
Address: Undisclosed
Tax Parcel ID #Undisclosed
Amount of Lakefront: 72'
In this example here is a property we will value based on the above comparables:
Subject Property
Sale Price: To Be Determined Below
Sales Date: Not sold yet
Improvement Sq Ft: 3500
Acreage: 0.70 acres
Address: TBD
New Owner: "Alex"
Tax Parcel ID #TBD
Amount of Lakefront: 100'
New construction value on Lake Osoyoos is currently running $200.00 per square foot. I am assuming your property improvements have depreciated approximately 50%.
The depreciated value of the home separately would be: $350,000. (3500 sq ft home)
All other comparable properties have water and sewer so we won’t adjust for these improvements.
Comparable #1 Improvements: $324,400.00 No depreciation (brand new house) leaving Land value at $675,500.00
Comparable #2 Land Value: $890,000.00
Comparable #3 Land Value: $750,000.00
The first thing we do with valuing land is to give the non-lakefront portion of the land value. Based on comparable sales we would give the non-lakefront portion value at $125,000. per acre.
Comparable #1 Land Value Non-lakefront: $125,000.00 X .08 acres = $10,000.00 Then you would subtract $10,000. from $999,900.00 leaving $989,900.00 then subtract the improvement value (above) $324,400.00 equals $665,500. to calculate lakefront value. Then $665,500.00 divided by 75’ equates to $8873.33 per lineal foot.
Comparable #2 Land Value Non-lakefront: $125,000.00 X 0.50 = $62,500.00 Then you would subtract $62,500. from $890,000.00 leaving $827,500.00 to calculate lakefront value. Then $827,500.00 divided by 140’ equates to $5,910.71 per lineal foot.
Comparable #3 Land Value Non-lakefront: $125,000.00 X 0.16 = $20,000.00 Then you would subtract $20,000. from $750,000.00 leaving $730,000.00 to calculate lakefront value. Then $730,000.00 divided by 72’ equates to $10,138.88 per lineal foot.
Taking these three per-lineal-feet figures and adding them together then dividing them by three gives us an average per-lineal-foot figure.
The average per lineal foot price is $8307.64 based on these figures.
Now we reconstruct the subject property as follows:
Non Lakefront land value: $125,000. X .70 acres equals: $87,500.00 We have already established the improvement values at: $350,000.00 The per lineal lakefront value is $8307.64 per foot X 100’ equals $830,764.00 Leaving the actual Value based on Comparable sales in the last 6 months at: $1,268,264.40
I specialize in Lakefront sales and I would love to market your property for you, let me know if you would like to list your property! To see the properties I have sold in the last 3 years go to:
Ryan's Sales
To see the properties I currently am actively marketing go to:
Ryan's Listings
To see information on the lakes in our area go to:
The Lakes of Okanogan County
-Ryan
Nice comparable analysis, i have known the trick and will do the same for me
This is one of great example of property analysis. Thanks to share
Good comparison.. are they final prices
Ryan, I really liked your breakdown above on how you calculate Lakefront value, howveer, the only Number I couldn't understand where it was driven from was the $125,000 per acre? How did you come up with that figure based on the comparables? THank you.. Teresa
Teresa-
At the time of this thread we were bringing $125,000. comparables for "lake view" properties that were 1.0 acre parcels, and we had multiple sales with consistency. Back then I never thought I would see the day come that unimproved land would decrease in value, but now my market area has lowered to $90,000. for 1.0 acre "lake view" property. These properties would be unobstructed lake view with power, phone, a water source and an approved perk test result.
Ryan
Yes, I'm seeing that here as well in the Northeast Part of INDIANA where we have over 101 Lakes in about 2-3 counties. So, the 125000 or 90,000 per acre- are you taking the comps total acreage and dividing it by the assessed land value to come up with the per acreage figure? That's where I'm stuck at?... Teresa, "IN Lakes Girl"
There seems to be no consistancy with assessed valuation in my area of North-Central Washington. So I take the $90,000 multiplier and mutiply it by the actual acreage size as long as it is under about 2 acres. For example: a building lot with a size of .63 acres with all amenities mentioned before; 90,000 X 0.63 = $56,700.00.
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