You are appraising a single-family residence located in the Belle Harbor neighborhood at 177 Beach 132nd Street. The property is located on the "beach block" of the local neighborhood, meaning that the beach is at the south (ocean) end of the street. A local bank has approved the borrower for a loan and you have been asked by the bank to appraise the property. Dozens of potential comparable sales were initially identified. Of those, three were very similar to the subject in their transactional, physical and locational characteristics and you decided to base your analysis on these three properties.
You summarized your findings regarding the three comparable properties on the attached matrix. All all three cases the comparable properties were sold on a fee-simple absolute basis, as is the subject property. Conventional mortgage financing is available and all transactions were done at arms length. Your conclusion is that no adjustments need to be made to the sale prices of the comparable properties for the type of property rights conveyed, financing terms, or conditions of sale. However, two of the properties had residual damage from the 2012 hurricane and resulting flooding, requiring the buyer of one property to spend $85,000 immediately after closing and the other buyer to spend $95,000. Similar damage to the subject property has already been repaired.
Comparable 1 sold six (6) months ago; Comparable 2 sold twelve (12) months ago; Comparable 3 sold four (4) months ago. You estimate that values have been increasing, on average, 0.5% per month on an uncompounded basis. Within the neighborhood, there is a sharp distinction between properties on the "beach blocks" that have immediate access to the beach, and those located inland by one or two blocks. Sales on the beach blocks are relatively rare, and two of the comparable properties are located one block inland from the beach. You estimate that beach block properties sell for 15% more than otherwise identical houses located on inland blocks.
In these neighborhoods, an incremental square foot of lot size is worth about $25 per square foot while additional living area is worth about $100 psf. Each year of effective age reduces the value of properties in this market by about $9,000. You experience suggests that each additional half-bath is worth $2,000; each additional full bath $4,000. Additional garage spaces, wood decks, and pools in these neighborhoods are worth $12,000, $8,000, and $25,000, respectively. No significant non-realty items were included in the comparable transactions.