On December 12, 2014 I published a wtf? post on 2 Grandin Riverview.
I questioned why there was an apparently, fully finished house sitting on a parcel that had been purchased for $2,650,000 on 12/1/2008 and 6 years later the Auditor’s records still showed a value of land for $826,270 with no improvements after the demolition of the original house. Dusty explained appraisers operate off of building permit records and a partial appraisal for 2013 had just been updated as of October.
Even though there was a logical explanation for the extra-long construction/valuation cycle, two interesting questions remain regarding this property as an example of concerns related to appraisals in general:
1. The Auditor relies on the building permit process to notify an appraiser to go out to adjust values after construction is completed. These records are also public. As one would expect on such a big, complicated project that ran into problems, 11 permits were issued., many closed-out as a result of the need to switch contractors. But there doesn’t appear to be any final inspection, the requirement for Occupancy of Residence, thus explaining the partial appraisal value.
How can residents be living in the structure if no final inspection has been completed? In other states, owners supply values of construction as part of the final permit process. Why don’t we do that rather than relying on an appraiser?
2. But the biggest concern regarding the valuation of 2 Grandin Riverview is the logic behind the land valuation, a widespread problem throughout the county. While improvement values can fluctuate significantly according to use and condition of the building, one would expect land values to be fairly stable, an apples-to-apples comparison in the same area – but they aren’t.
One of the prime pieces of real estate in the city of Cincinnati, 2 Grandin Riverview consists of 2.615 acres on a private lane in Hyde Park with a beautiful view of the river. Immediately after the demolition of the original home, the value of the land was assigned as $701,190 or $268,141 an acre. On the most recent appraisal last October, I am happy to report the appraiser valued the land at $1,414,870, or $541,059 an acre, almost double the value 3 years earlier. The partial value of the 19 room, 8,777 square foot home is $1,788,870, bringing the total to $3,203,720.
Now let’s compare the land value to the only other house on the street at 3 Grandin Riverview that consists of 4 parcels. The 2 biggest parcels are 3.949 acres, valued at $1,022,690 or $258,974 an acre, and 1.652 acres, valued at $84,990 or $51,446 an acre.
There we have it, same street, properties right next door to each other and we have a range of values from $51,446 to $541,059 an acre – a ten-fold difference. Come on. Zillow gets closer than that. Of course the confusion is somewhat understandable in that Bob Castellini seemed to think the lot was worth over $2.6 million – or close to a million an acre – since that’s the arm’s length price he paid for the tear-down.
But the real travesty of our current values is only apparent when comparing these big, river view lots to nice, normal homes in nearby neighborhoods.
I grew up at 3511 Principio in Mt. Lookout, at the top of the hill near Ault Park. It’s not a fancy house and sits on a modest quarter acre lot. The value of the land on that 8 room, 2,260 sf house is $164,350 or $684,791 an acre – more than 26% higher than the river property at 2 Grandin Riverview and more than 264% higher than the most expensive parcel at 3 Grandin Riverview.
What have I missed this time, Dusty? What’s the explanation behind modest homeowners paying taxes on consistently higher per acre land values, subsidizing basic services and education costs for the wealthiest among us?