Have you ever seen a high-voltage tower INSIDE a backyard? I’ve seen towers behind backyard fences, but never something inside until my appraiser colleague Dawn Foucault shared a couple images of a brand new neighborhood in Sacramento. What the? Can you believe it? Let’s kick around some thoughts.
The PG&E tower is operational AND is located inside the parcel lines of the subject property. By the way, Dawn gave me permission to share these images.
Here’s some initial thoughts on my mind. Anything to add?
1) Surprise: Anyone who works in real estate sees some odd stuff, so I’m not all that surprised at most things. But with so much conversation around the safety of electromagnetic fields in recent years, I’m a bit taken aback to see something like this. I’m sure there is a technical reason why the building department allowed this to happen, but that doesn’t replace my shock. Can you relate?
2) Resale value: Properties like this tend to struggle in the resale market. They might be able to command a decent price when selling directly from the builder, but in the future after the allure of a brand new home has worn off, many buyers will simply pass on properties with adverse or odd issues. This is especially true in markets with higher housing inventory.
3) True Comps: We can’t assume the house next door is a perfect comp because there is likely a value difference between a property with a high-voltage tower INSIDE the backyard vs being located NEXT DOOR to a tower. In an ideal world we’d find other sales with high-voltage towers inside the backyard (or maybe something equally adverse) to help tell the story of value for the property. In this case there was actually one other sale in the neighborhood a year ago with a backyard tower, so my appraiser friend lucked out to say the least.
I hope this was interesting or helpful.
Questions: What do you think after seeing these photos? Would you ever buy a house like this? Why or why not? I’d love to hear your take.
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You’re sure to be a hit around Halloween when you naturally glow in the dark!
Sources have confirmed that the EMF (electromagneti field) emitted by high-power lines do interfere with a body’s natureal EMF, and can cause cancer.
Ha. Thanks Tom. Yeah, it’s always a bit scary to me when we start mentioning the C word.
I wouldn’t buy such a house because the tower is an eyesore, but the electric company should be paying the homeowner big time rent.
Lots of people can relate to that I’m sure Catherine. I’m sure the electric company is paying the owner nothing because they have an easement to use the property. I wonder if there were any special disclosures about the tower within the purchase contract.
I’ve appraised something similar within the last year. In this case the tower was in the front yard and the power lines ran up the block. If you owned a house on that side of the block you had to drive under the power lines. About every 10th house had a tower in front of it. Technically the power company owned the strip of land under the towers and granted each homeowner a deeded easement (the driveway) to access thier property. There was adequate data to analyze. Surprisingly, market extraction showed only about a 10% adjustment. This was a lower-middle income neighborhood.
Thanks Mike. I love hearing about a specific situation. It would be interesting to see if the reaction would be great if it was the backyard instead of the front. Kudos for there being adequate data.
I can’t quite tell from the pix, but if it is a 345KV transmission line – the answer is “NO”! If it is a 115KV line, then probably “no”. Static electricity and cancer risk will be problems that should be disclosed upon resale. I wonder if electronics within the home, like wifi, etc., are affected. Your diminished resale comment is right on the money! From the pix it appears that several surrounding homes would be within the “fall footprint” which was a concern in the past. However, any storm large enough to cause damage to the tower would probably damage the surrounding houses anyway. I can’t imagine this would happen in a mid to higher priced subdivision.
Thanks Paul. I appreciate your take on things. I received a fantastic email from a local Realtor who reminded me of some towers in some upscale developments, though the lots are MUCH larger in size, so it’s not really the same thing to have one in the immediate backyard of a lot that isn’t all that large. I think of Sunridge Park in Rancho Cordova as towers are very close to the neighborhood. But there is still a difference between being outside the fence and inside in my mind. Or at least it’s a difference we have to consider as we come up with a value. I just wouldn’t assume it to be the same reaction. I think your point on price range is huge too as the reaction in the market at the lower end and higher end could be two different things.
I welcome anyone’s thoughts, opinions, experience, etc….
Los Lagos, Granite Bay
Yep. Thanks Jim. There was actually one in a smaller lot in South Sacramento recently too. Not too common.
WOW!!! WHO would purchase such a property??? Although, I did have a buyer who was more than willing to purchase a home with a tower in a lot next door (practically in the backyard), he wasn’t bothered by the tower because the home had room for his RV and that was his priority! ;))
None-the-less, the photos are stunning! I can’t imagine having to sell that thing!! ;))
Thanks Bev. It just goes to show we all have different needs and wants. I am not an RV guy, but I totally get that. Sometimes buyers look for one feature and that one thing gets more weight than anything.
A few years ago I appraised a house with a cell tower in the back yard. The cell tower gave the homeowner a sweetheart deal with the lease. In that case, I scowered an entire state for comps to pair up and isolate a value fore the tower. In that case, the tower was a valuable income stream for the owner. I’m not saying a cell tower is the same as a transmission line, but I’m surprised there is no income stream from it. Thank you for the post.
Thanks Gary. This is a great example. I would honestly be open to a cell tower if I had a large property (probably not so much on a smaller lot). Hopefully you knew about the cell tower in advance instead of, “Oh, by the way, I have a cell tower in the backyard” when arriving. 🙂
Hello Ryan, when I first the photos and the blog I thought oh wow, Ryan has either lost his mind or started drinking early in the day. Then I saw the plot plan and drew a deep breathe being greatful that the assignment wasn’t mine as the first fist fight would have been with the client over increase in fee. Then chasing data. Right now the market is nuts and because of the shortage of inventory in my area of So Cal, I can just hear the interview with the listing agent telling me there were multiple bids. Yikes. Because of this market and potential that somewhere in the near future this market Wil crack I would include some sort of a clause that stipulates any future impact to subjects marketability could be more significantly impacted based on market conditions at that time especially if an over supplied market existed. Last thought did FHA remove the fall line comments? Curious how the underwriters and secondary market would look at this property? Did you get any input from lenders on this property? Thanks Ryan as usual good post.
Thanks Brad. No early drinking for me. 🙂
I think you would be very smart to talk about the marketability of this home and potential for the marketability to change not only when the property is no longer brand new, but if the market changed too. Perception doesn’t stay the same. That’s for sure. I would have comments and photos in multiple locations in the appraisal for something like this so that it is fully disclosed and discussed.
I am not sure off the top of my head about FHA. Several appraisers have said FHA and VA would not do this. I would think it’s a clear safety issue, but I haven’t read the fine print of FHA on this in some time since it’s been a while since I’ve encountered this issue personally (since a colleague encountered this situation as I mentioned in the post). However, I asked a loan officer friend and he said, “Would be very difficult to finance.” That alone is something buyers need to consider. If you have financing or appraisal difficulties because of something unique about the property, you might have more as time goes on. I find this to be true when a property has square footage in the basement, non-permitted additions, or something else funky.
OMG!!! Can you imagine the hum you and your neighbors would hear from this EMF? Your children would glow, not to mention the “afterglow plasma”!! We always look for wires and EMFs. Unfortunately, if the neighborhood is older, there are poles and wires everywhere. But that BIG thing? Are they crazy? I hope they’re getting bags of $$ from the feds or electric company. I don’t think our health is worth that, though.
Thanks Roxanne. You are certainly not alone in feeling this way. You are so right about power lines and poles being everywhere in old neighborhoods. This takes it to a whole new level.
#1- No I wouldn’t ever purchase a home with a tower like this in the backyard, and
#2- Are you free to share the value difference for the tower? Just curious. Also, I wonder what the motivations of the buyer were to purchase this property? Like you said, maybe there wasn’t too much of a price difference from the builder to the buyer so why would anyone buy this house?
Thanks Tom. I always like hearing from you. I’m not at liberty to say. Most buyers are going to have a strong negative reaction for something like this, though there are a smaller number of people who wouldn’t care for whatever reason. This is where it comes in handy for a builder to sell a property like this because the builder can control the marketing and pad a contract with incentives to help get the deal done. When the owner goes to sell on the open market, he/she will not have that same marketing luxury.
Something like this would absolutely DESTROY the desirability of this home. I could see soooooo many people passing up this property because of this. At least a 10% adjustment down, which is huge depending on the price range (could be $30-50k!)
The perfect buyer for this would be someone who reeaaaaalllly wants to get into the neighborhood, and wouldn’t be able to afford this home otherwise. But from getting a huge discount because of the tower they’d be able to afford it.
Thank you Wes. I think you are 100% correct here about the negative in the resale market. Someone reached out to me over email to say, “This sale actually sold without much impact when we look at other homes in the neighborhood without towers inside the backyard.” I get that, but the issue we are all talking about is the resale market. Builders can control their marketing and help create their market, but what happens when the builder is gone? That’s the much bigger issue. I suspect a discount will happen, though let’s listen to the market and see what goes down.
This is a prime example of “OBSOLETE”, uncureable!! I have forwarded this to my grandaughter who is a structural engineer at Bonneville Power Authority in Washington. Maybe she knows something about this.
Thanks Truett. Yeah, this is a really challenging situation. I think it’s easy to lump this one in with properties that are next door to a high-voltage tower, but it’s a whole different thing to have the tower INSIDE the backyard on such a tiny lot.
Wow…I would have declined the assignment, personally. With only 1 comparable in the subject market/development to define and quantify a negative impact, an appraiser is playing with fire. Hopefully the appraiser got an appropriate fee and did the proper diligence to justify any statements/adjustments made within the report. Justifying an adjustment or lack thereof on something that unique puts an appraiser in a precarious position. I know that in my area, it would be very difficult to achieve credible assignment results on something like that. A buy back could be the end result.
I hear you. I’m going to follow up with some analysis at some point. Honestly, I’m not sure why my blog even sent this old post out this week. I don’t know what happened. But I love the extra conversation today.
I wouldnt live within blocks of that entire power line, let alone unfettered access to a giant ‘ladder’ for idiot kids.
can you imagine the home insurance rates?
can you even GET insurance?
and what about service access? you certainly cant landscape to cover that up and whatever yard you have will get destroyed if they ever have to access that tower.
You know, I do wonder about insurance in today’s insurance climate.
Oh my goodness! I would NEVER buy a house close to or near these towers, let alone in my backyard. Even if PG&E IS paying the owner rent, it is not clear yet, how these waves affect the body. Even now I wear Tesla like Bio wrist bands to help offset the 3,4 and 5G emissions…. who knows if they work! Lol… I choose to believe they DO! Thank you, Ryan! I love your blog and it really helps me in navigating this market! : )
Thanks Patricia. Yeah, that’s a big topic. I’m not sure what to think on it. I’m personally careful.
Well, I can’t say that I’m surprised by it even though it reeks of liabilities galore but then again, we have a state governor who bailed PG&E out of jail time due to their negligence and the town of Paradise burned to the grown. And guess what happened shortly after? PG&E was approved by the commission for a 22% increase to help pay the dept I am reasoning.
Lets just pray that the soon to be owner of this property with the tower that their children are not climbers.
It’s wild to see this for sure. The property actually sold in recent years, so I’m going to do some graphs at some point. This is a conversation piece.