What is a view worth? In a lot of ways, a view is unZillowable – how does one quantify a great view?
What is a “great view”? Mountains? Urban life? Both?
Charlottesville has quite a few condos; (for these purposes, we’re not talking about condo conversions which are occasionally challenged). While we obviously have neither the volume, scale, nor heights or prices of New York City real estate, we can draw parallels from their market and analyses.
Starting with the advice given by appraiser Jonathan Miller who explained to Brick Underground:
“how he correlates dollar figures to floor numbers.
“When it comes to floor level adjustments, we separate floor height and view into two separate amenities,” he says. “The floor level adjustment reflects the actual and perceived changes in natural light, street noise and security.”
The adjustment is bigger when comparing a second-floor apartment to a first-floor apartment.
Depending on market conditions, he says, “a typical adjustment might be 1% per floor before considering view differences. That’s 1% of the price of the unit you are comparing it to.”
So – higher is better. Lower is less better. 🙂
Candidly, I don’t think we have the market to allow for application of that type of analysis. For better or worse, the Charlottesville market is one in which “floor premiums per se don’t factor in as much as what the buyer is willing to pay and the seller is willing to accept. I always do a specific data analysis when evaluating condos, but ultimately if the buyer is seeking X and the seller will accept Y, data aside, a meeting of the minds likely won’t be found.
But, I still find the analysis provided by Noah Rosenblatt’s analysis at Urban Digs insightful and potentially applicable to the Charlottesville condo market.
There are two main elements in figuring out what kind of floor multiplier you should use when doing a comps analysis to what hopefully is a same-line sale (same footprint, different floor): TYPE OF CHANGE IN VIEW and AMOUNT OF GAP IN FLOORS.
TYPE OF CHANGE IN VIEW: When comparing two in-building same line comparable units we need to determine the level of change in the view quality. In other words, is there a drastic difference in the view or is there no difference in view? Lets take two hypothetical examples to explain this point:
What does this segment of the Charlottesville real estate market look like? A few examples:
The Waterhouse – still under construction, still not selling as far as I know. But they’re going to be getting another floor, so their floor premiums may go up – as may their prices. I’d wager that per-square-foot these are going to be the most expensive condos Charlottesville’s ever seen. (there’s likely a story or two to be written about this project)
The Gleason – Great condos in downtown Charlottesville, about two blocks off the Downtown Mall
The Barringer – Perhaps the best-located UVA condos.
The Holsinger – located right on the Downtown Mall, among the highest-priced condos in Charlottesville
I’ve represented a couple buyers in the Gleason and have taken a few photos while there.
Which view would you value more?
Hint: the first one is the 5th floor; the second is the 4th.
