Hello to all. I did a comp report on a vacant 1.9 acre property and it came back with a retail value around $17k. When pulling a search in that area, Prycd comes up with a much higher value on properties in the same subdivision. Parcels in the 2.0-2.2 acre range are listed with a market value of 25-27k. These are maybe 4-5 parcels down from the $17k parcel. The whole subdivision is undeveloped with no utilities and the lots are all the same shape(square). I would expect these parcels to be very close in value. Can someone help me understand the discrepancy?
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Also, it could be because of slop degree, difficulty of access, one parcel may have direct access the other very limited access etc.
Thanks for the response. I did find one difference between the properties. The 1.9 acre parcel is partially in a flood zone, while the 2.27 acre property is not. Does Prycd take that in to consideration or is that coincidence?
Hi Marcus,
We appreciate the question! The reason there is such a difference has to do with how we are modeling the properties and which comps are being included in those models at certain acreage tiers. At 1.9 acres, you will be somewhere in the range of 1-4 acres for comps included in the model. At 2.27 acres, the range is more like 1-5. So there will be a wider range of parcels included, which can make for some jumps in price at these boundaries.
Our formula for which comps to include based on the acreage of the property is not a linear one, At a smaller acreage (i.e <2), you wouldn't want to include large comps, given that the economics of a 0.50 acre parcel is very different from even a 4 acre parcel. Conversely, at larger acreages (ie >20), there may be fewer comps to include, but the economics of a 15 acre parcel is somewhat the same as say a 20, 25, 30 acre parcel. So as the acreage of a property increases, so does the range of allowed comps. In your scenario, 2 acres happens to be one of the dividing lines between our formulas for small parcels versus medium sized ones.
Hopefully this makes sense! Please let us know if you have any other questions.