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appraisal issues

The Golden State Killer’s house (poll results)

May 23, 2018 By Ryan Lundquist 13 Comments

We recently talked about the Golden State Killer’s house and I put together a poll. If this house came to the market, what sort of price reduction would you expect if any? Let’s look at the results and talk through some ideas.

POLL RESULTS: There were about 400 votes. Thank you everyone for voting. I’ll actually leave the poll open for a couple more weeks and you can vote HERE.

KEY POLL TAKEAWAYS:

  • 37.6% said the impact would be 0-10%.
  • 41% said the price discount would be 10-40%.
  • 21% said there would be a discount above 30%.
  • Most respondents hovered between 0-30%.
  • Votes declined as price discounts increased. 

THOUGHTS ABOUT THE GOLDEN STATE KILLER HOUSE:

Minimal impact & marketing: Close to 1 out of 3 people said this property would sell with a price discount of 0-10%. Thus there are a good number of folks who think either there could be no impact to value at all (or a minimal impact). I wish I had narrowed the poll down to 0-5% and 5-10%, but I can’t go back now. This result doesn’t surprise me at all because many real estate professionals and the public have said, “It’s probably not a big deal.” Yet to be objective, let’s not forget this home has a potential marketing issue because it has a smaller pool of buyers even willing to consider purchasing it. I’m not trying to sway opinions, but only saying let’s think about how a more limited pool of buyers might impact value before we claim there is no value issue.

No bodies or crime: One of the big conversation pieces over the past two weeks was that no crime actually occurred at the home, so there really couldn’t be any damage to value. I understand that sentiment, but let me play devil’s advocate. Why not? Close to 2 out of 3 people on my poll said there would be a diminished value despite no crime taking place on site. Also, many locals have said they would not purchase the home at all. So it begs the question, do we need bodies or a crime for there to be a stigma? This poll is nothing scientific, but a lack of bodies clearly didn’t matter to some respondents. I find it’s easy in real estate to make sweeping value generalizations, but I guess this reminds us to be cautious about that.

Selling at a premium: A number of conversations have suggested this property could actually sell for a premium. I completely agree there are buyers out there who would pay more for whatever reason. Yet to be fair (and technical), do these buyers represent the market? Would the market as a whole pay more for this property? That’s the big question to ask when it comes to thinking through value.

Market value: If we lined up 100 qualified buyers to purchase this home, and they were informed that a notorious rapist and murderer owned the home, would it matter for value? There might be individuals willing to pay a premium, or some who wouldn’t care, but what about the market as a whole? That’s the big issue, and it’s frankly challenging to answer a question like this. In fact, there are entire books written about detrimental property conditions, so I won’t pretend this is an easy issue to dissect. Let’s remember banks lend on market value too instead of one individual buyer’s perception of value, which underscores the importance in thinking in terms of the market.

Housing shortage isn’t the trump card: We have a sincere housing shortage right now, so I’ve heard things like, “Because there is a lack of inventory, this isn’t going to be a big deal for buyers.” I think there is something to that because when inventory is low, buyers tend to overlook some negative issues. Likewise, when there are too many homes on the market, negative issues stand out like a sore thumb. So there’s some truth here. Yet my observation is that a housing shortage has not been the ultimate trump card for other homes with negative issues in today’s market. What I mean is buyers have exhibited sensitivity toward overpriced homes and properties with adverse locations or issues. Again, I’m not saying there is a price reduction for this property, but only that a housing shortage has not seemed to erase negative issues for other properties in the market. Yes, buyers are desperate to get into contract, but at the same time my sense is they’re not so desperate that they’re overlooking negative things either.

I know I sound like an advocate that there is a price reduction, but if you read carefully I haven’t actually said that. I’m only bringing up ideas to help us think critically. I welcome your take in the comments. And let’s hope we do get to see this property sell so we can see who answered correctly in the poll.  🙂 

I hope this was interesting or helpful.

CLASS I’M TEACHING: Next week I’m doing my favorite class at SAR called “How to think like an appraiser“. It’s from 9-12pm on June 1st. We’ll talk about comps, adjustments, value, etc… It’ll be fun. You’re invited.

NOTE: This is not a scientific poll. Take it for what its worth. Let’s think critically about value and have conversation. That’s the goal.

Questions: What do you think of the poll results? Would you buy this house? I’d love to hear your take.

If you liked this post, subscribe by email (or RSS). Thanks for being here.

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Filed Under: Random Stuff, Resources Tagged With: appraisal issues, Citrus Heights, detrimental property conditions, East Area Rapist, Golden State Killer, Golden State Killer house, House Appraiser in Sacramento, poll results, property with a history, property with stigma, Sacramento Home Appraiser, Stigma

Which house is out of place in the neighborhood?

December 19, 2012 By Ryan Lundquist 2 Comments

Put your real estate critical thinking cap on and squeeze out some thoughts for me. Which house looks like it might be just a bit bigger than others?

Overbuilt house in neighborhood - Photo by Sacramento Appraisal Blog

I know it’s obvious. If you guessed the 2-story house that’s about twice the size of most other houses in the neighborhood, you’re right. Isn’t it amazing to come across homes that far outweigh others in a neighborhood? I found this gem last week during an appraisal inspection. This house is just over 3,000 square feet in a community where most homes are half that size between 1300-1500 square feet. It has 7 bedrooms and 4 bathrooms, whereas other homes tend to have either 3 or 4 bedrooms with 2 bathrooms. Additionally, this super-sized McMansion has a 4-car garage while most houses have a 2-car garage.

Is it overbuilt? What do you think?

big house photo - by Sacramento Appraisal Blog

Blogging Tip: Use a “photo stitch” app on your cell phone to stitch together photos like I did above (just search “photo stitch” in your app store or market). This is a great way to post an original picture on your blog, and it’s especially good for “before & after” photos or any sort of comparison.

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

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Filed Under: Appraisal Stuff, Photos from the Field Tagged With: appraisal issues, appraisers in Sacramento, Home Appraiser, home appraisers, House Appraiser, Over-improvement, picture of big house, Sacramento home appraisers, superadequacy, The Appraisal Process, things appraisers deal with, too big for the neighborhood

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