Friday, February 1, 2019

Urban Condos and Appraisal

Urban condos have some unique qualities that can make one identical unit in the same building have a broad range of price discrepancy. Now differences in similar units are certainly not exclusive to urban condos; homes on corner lots, homes with a view, backing to open space, etc can all add or detract for the market value. But urban condos add additional dynamic and not all appraisers are in the "know". Simple concepts like interior facing units versus exterior facing units might seem simple enough, but does the appraiser know that one is exterior and the other is interior. Maybe, maybe not. Appraisers do not go inside the comps they use, rather relying on data from the local MLS and tax records.

It is important that Realtors® make these differences clear when listing a unit with favorable conditions. There are other items that carry some weight in suburban housing but much more importance in an urban setting. Walk scores are used by a variety of websites to determine how well a property fares when the resident is walking rather than driving. In suburbia this is not as pressing as most suburbanites expect to do a fair bit of driving to get things done. But in an urban condo people often choose to either not own a car of share a car between them. Walkable scores and easy access to public transit are critical. Realtors® should not assume that appraisers get these dynamics. Putting that info in the remarks, which most appraisers WILL read can help that appraiser understand why a buyer offered X for a unit that "seems" similar to another that sold for Y.

Different buildings may be very close to one another yet have dramatically different prices and quality levels. In suburban developments neighborhoods vary wildly in quality and desirability. In urban areas the "neighborhood" can be as small as a single block. In a secure urban building you can have units selling for seven figures because the building has super high end facilities and the units are up high with great views and a building literally right next door has similar sized units for 1/3 the price. It's all good in the neighborhood 'downtown'.

Locally Vancouver USA is rising up with a lot of mid-rise and high rise development going in downtown and along the new waterfront. It's a very exciting time, but we Realtors® still have to stay sharp and frosty and be sure to help both the buying public and appraisers understand the intrinsic value proposition of their listed units ;)

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