Going around again, and again . . .

Recently, I have been enjoying the use of a roundabout in Chattanooga, Tennessee just east of Interstate 75.  As an appraiser, primarily in litigation support for eminent domain, I have been bidding on small Georgia DOT right of way appraisal acquisition projects for roundabouts in North Georgia.  So my worlds have collided - but not literally thank goodness.

Originally, I thought it was crazy.  I have driven in Southern Germany in the roundabouts and the folks there get it.  Not as much here in the states however.  But, after using this particular location in East Tennessee in the past couple of weeks, I find I am becoming accustomed to it, and actually like not having to wait for the light - only the traffic.

Good call GDOT!

Georgia & Tennessee are not the only states implementing this!

How to determine if and how much impact to value?

It is always a challenge to consider the impact a proposed road widening will have on a property. Sometimes designs are amended when the view on the ground makes an impact quickly discernible. But how do you know what impact, if any, there is to value?

After thorough analysis and review of the relevant literature, sometimes simple is better. If we are taking 20% but that reflects 1/2 of a businesses display space, then the impact is likely closer to 50% than a quarter of the value.

Just wow

Below is a redacted version of some emails between one of my largest clients and myself about a recent competitive bid.


On Sep 25, 2012, at 8:33 AM, "Client, Mr" wrote:

RE: Project No: ABCD-456-00(000) Georgia Co.
P.I. No. 1234567

The following contractors have been awarded the work on the above referenced project:


Contractors
Service
Awarded Bid
Blah blah real estate appraiser
Appraisal Reports (Level 2)
$ 6,135.00
No Bids Submitted
Cost to Cure



Best Regards;
Mr Client


From: Christina Holmes [mailto:christina@christina-holmes.com]
Sent: Tuesday, September 25, 2012 9:28 AM
To: Client, Mr
Subject: Re: Project No: ABCD-456-00(000) Georgia Co Appr Bid Award

Is this the price they bid or are we missing a digit somewhere?

iPhone


Reply from Mr Client:

Actual bid


My bid? $32,600, 23 appraisals - average fee $1,417 each

Winning bid? $6,135 for the same 23 appraisals, average fee $266 each

I believe we should earn more than that for the substantial amount of education, licensing, experience, time and energy our profession requires, not to mention our court fees under these contracts are $50/hour - about 1/3 the industry average.

Just wow

bidding is a process

On my way back to the office from a competitive bid meeting, reflecting on the process. Competition is good and surprisingly there was quite a lot of it at today's bid - maybe 10 real estate appraisers for a seven parcel project. The good news was, the appraisers in the room are all long term, professional valuation folks with many years of experience. The surprise is that we call showed up. It was, as one appraiser put it, a great social interaction. Next time, I may check with the team manager before heading that way . . .

research today

The world around me changed pretty fast while I was not looking.  Back in the day, we would go to the courthouse, read the deeds in the big heavy books, borrow the clerk's telephone book and a quiet office, and make telephone calls to verify sales transactions.

My how things have changed!  Not too many folks have telephones (at least at home) and corporate real estate departments have scattered their employees for 'tele' working.  LinkedIn, FaceBook and emails are the best way today to reach out to confirm sales and rentals in most cases.  Is that crazy? Or is it just me . . .

So if you need me, just email.

Train or traffic?

My dear friend Val sent this to me.  It is a good article about the ENERGY cost of train versus automobiles at present.  We are a culture, America, that grew up on independent travel.  The trains seem to work well in Europe, I think partly because of the smaller distances and more dense population and partly because Europe grew up before automobiles were invented.  What do you think?

Communication

The single biggest problem with communication is the illusion that it has taken place.

— George Bernard Shaw

A quote I really like and to which I often refer comes to mind as I contemplate a valuation conversation with a real estate expert at banking management levels.  For me, when I review my own properties, I often cannot see what the value should be.  It is hard for me to separate my desires, wants, and needs from true value.

The market does not recognize my needs specifically, and based on the underlying principle of substitution, that market (i.e. buyer) can chose another alternative versus my property.  As humans, we value what we have already acquired, for whatever the myriad of reasons may be.  They are often non-pecuniary, having nothing to do with the market value.  Residential, particularly, is a bit tougher than commercial, since it often has more emotional investment.

The question is, will I be able to adequately communicate the market data to provide enough information to help the seller make what I perceive as a good decision.  Ultimately, it is their decision.

alternative use?

Driving north from Thomaston yesterday, I saw an interesting adaptive reuse of a bank building. (Note, photo quality is not great; I was stopped at a traffic light).  


Would you believe it is a Chinese restaurant?  Ok, that is a new one for me, and I have seen quite a lot of adaptive reuse in the past five years.

Parking

And in light of all this parking discussion, here are some prurient parking photos for your viewing pleasure!  Innovative, car park designs . . . Prurient Parking Photographs

Government WORKING!

Yesterday was a very busy one filled with all kinds of unexpected information and experiences.  From Central Georgia to Atlanta to Chattanooga, it was quite an 18 hours.

The most delightful and unexpected (other than family dinner), was our visit with the City of Atlanta Aviation Department's Vivica Brown, Deputy Assistant General Manager at Commercial Development, and Katie Stanciel, Director of Parking.  Working on a valuation analysis for them, we met to get details about income and expenses for parking.  Vivica has been very responsive and on-task about getting us information and introduced us to Katie for the details.  


This is no Mickey Mouse operation (no offense to Mr. Disney).  The Airport has more than 30,000 parking spaces - the only larger operation in the US Katie knew of is in Denver.  Their website has the following:

Parking - Domestic Terminal:

There are more than 30,000 public parking spaces at Hartsfield-Jackson, including over 10,000 in covered parking decks, 7,300 in Domestic North and Domestic South Economy parking lots, 1,300 in the Domestic Park-Ride Reserve lot and 7,800 in the Airport's Domestic Park-Ride lots. Special parking spaces are also provided for disabled passengers in each lot.

So what happened?


Lo and behold, we asked for all kinds of information and in under an hour, we had every bit!


This was IMPRESSIVE to say the least, and Katie did it with a beautiful smile and delightful attitude.  Kudos to the Aviation Department for hiring and keeping such fantastic people as Vivica and Katie.

Lateral Support

Ok, so it has been quite a bit of time since my last post.  With two teenage daughters, notice to proceed on 50 or so appraisal reports, and returning for post graduate education, left over time is in short supply.


However, this is rather important.


During my class, and particularly a quiz I just took, it occurred to me that there are always parallels in life.  We are studying property rights, and one of my quiz questions was "what is lateral support".  Defined by my text it is "The right of lateral and subjacent support is the right to have land supported by the adjoining land or the soil beneath."  Real Estate Law, Robert J. Aalberts, 2012.


What if we replace the word land by the word "value"?  Is there some particular right of property owners to be 'supported' in their values by adjacent values or 'lateral support' of other property and other financial instruments and perhaps even the fiscal policies of our government.

Consider this:  

It seems to me that our lateral support is rapidly disappearing.  Perhaps we ought to take action, quickly!

Technology is helpful if you use it.

Would you agree? Is that true for you?


We recently spent two days in South Georgia reviewing a market and taking photographs of land sales all over a county. In the interest of getting the 'best' pictures, we used a nice digital camera.


Arriving back at the office in Chattanooga, we began the task of matching the photos to the sale information. I opened iPhoto and got to work, but alas, there was no map showing the picture's location. I mentally reviewed my potential errors and found to my surprise, I had been using my iPhone or iPad to take photos at the end of the previous project for clean up because it was easier (the camera you have is the one you use) and those devices (iPhone/iPad) both take great pictures. They also have 'geolocational' feature which means they 'tag' every photograph with its location within about 10 meters.
Alas, the "better" photos were NOT better because they were missing what for me has become a key ingredient in my picture taking, geolocational tagging.


Guess I will be giving my 'camera' to my daughter Katherine. For me from now on, I plan to exclusively use my iPhone and iPad for work photographs.


(and plan for my next trip to Italy so I'll have a map on iPhoto that looks like this one . . .)

under all is the land

It is always exciting to me and fun to explore and evaluate new aresa. We recently were approved for a right of way appraisal project in south Georgia and found that those folks are outstandingly nice and helpful. Our first step is always understanding the market, intitially as evidenced by area overview and land sales. Most things are tied to that underlying land and in today's world of technology (as I write this on my iPad on the way to another bid meeting), we STILL do the same things, only faster. First to the Tax Assessor's office online, great source of subject and comparable property data through qPublic.net. Then, in person to the Assessor's office to look at the 'real' property record cards - which are now, too, online in WinGap - even in their office. The office staff and appraisers were VERY helpful and knowledgeable - they will certainly get a prize from us at the end of the project. These experts can describe and discuss the data in real terms of who is buying and why, who is selling and why, and what trends are showing in the data. We wish them all expedience with the annual digest - which they are working on now. More later about the Clerk of Superior Court - repository of actual deeds (and yes they are available online too).

Memories, like the corner of my mind

In the past weeks, I have been working on compiling my education and experience in real estate since 1987. An amazing set of opportunities have always presented themselves, and for that I am extremely blessed.

Crazy as it sounds, eating an elephant one bite at a time has resulted in almost 1,400 classroom hours I can document (more than a few missing certificates) and better than 40,000 hours of work in my field.

Still, every day, I learn something, and many days, I learn quite a lot. Ever grateful I am and continue to be for all the wonderful, knowledgeable, patient and considerate people with whom I have been blessed to work. If you think you are on this list - a very long list - you are right.

Thank you!!

tools are cool

Reinvestigation and renewal is most always good.  I have been much more focused on real estate brokerage over the past nine years and had drifted away from using the Institute and the IR/WA tools and resources.

The good news . . . while I was away, they were BUSY!

Remember the world before GIS, iPhones, and iPads?  Applications were what we filled out for lenders from whom we wanted assignments.  We looked through Deed Books page by page for data.  All that has changed.  Did you know that the Appraisal Institute even has a podcast - with some great topics and speakers?

The IR/WA is leveraging social media to connect with all right of way professional disciplines - a changing industry for certain.  If you worked for Georgia DOT back then, you will remember the brief push for metric plans and calculating awards in hectares.

Like slipping into a pair of the most current version of your favorite old Cole Hahn driving mocs, it is exciting and comfortably familiar at the same time.

To buy or not to buy

So my current analysis of land values in a certain southeastern metro Atlanta county revealed that over the past 24 months, the majority of vacant land transfers have been, NOT.  What does that mean?  Well, looking at the thirty some odd sales of vacant land, more than twenty were deeds under power - you know, foreclosures.  That is a pretty significant number for a county with a land size more than 300 square miles and two major interstates running through it.

Although we are seeing some return of commercial market activity, it seems that land ownership is still mostly speculative.  And, lenders seem unwilling to continue taking the risk of a loan without payment and are taking property back for resale, sometimes, apparently, for $0.30 on the $1.00.  If you still have cash, now might be a great time to speculate.

Why do I do it?

For me, most of my life has been about reactivity. In the past 10 months, I have been blessed with this little voice - no, not my own, but one I trust, encouraging me to take time.

Time is short with my girls. They are in their mid-teens and I am greatful to be making the proactive step of spending more quality time with them. I am greatful for the knowledge, education, and experience which provides this career!

the closer you are . . .

"In order to determine potential losses in value for residential improvements due to the location-proximity of the new alignment/right of way for Georgia Highway xx south of Xxxxx, the appraiser has reviewed market information regarding the 13 improved sales and their distance from existing roadways."

Have I considered enough evidence?  Does a new alignment have more impact that widening an existing roadway?  What impact occurs from a new roadway to a residential improvement?

These questions swirl around any analysis regarding bringing a roadway closer to a house.  And as a professional, I tend to do the same quality work for condemnors and condemnees.    Basically, proximity impact is shown from market evidence, typically from the market/sales comparison approach by comparing distances at sale.  We filter data and extract items such as underlying land value and adjust for construction date, type and quality, number of bedrooms and baths, or square footage.

We consider the relevant data, apply an analysis tool, and voice an opinion.  Sometimes we use statistics, sometimes we consider paired sales.  

In the above analysis, I reviewed over 100 sales to get 13 'good' ones.  Was that sufficient?  What if only two good pairs presented themselves for comparison?

As appraisers, we should consider and utilize all the valuation methodologies available to us.  But, at what point do we complete that analysis and make a determination for value impact?