You are appraising a 480 acre irrigated farm with a current valuation date. Improvements contribute $210,000 to the property value. The property is located outside Lotta-Water Irrigation District; irrigation water is obtained from an on-site well and pumping system. Supplemental leveling is needed for the entire property. County zoning for properties in this area is AG (General Agriculture). The property is not located in a known flood hazard area.
Sale 1: 440 acres sold 2 years ago for $4,055,000. Building improvements contributed $215,000 to the price. The property is located in Lotta-Water Irrigation District; all irrigation water is obtained from Lotta-Water Irrigation District. Supplemental leveling was needed for the entire property at the time of this sale. County zoning for properties in this area is AG (General Agriculture). The property is not located in a known flood hazard area.
Sale 2: 520 acres sold 1 year ago for $4,640,000. Building improvements contributed $195,000 to the price. The property is located in of Lotta-Water Irrigation District; all irrigation water is obtained from Lotta-Water Irrigation District. The property is adequately leveled. County zoning for properties in this area is AG (General Agriculture). The property is not located in a known flood hazard area.
Sale 3: 400 acres recently sold for $4,025,000. Building improvements contributed $170,000 to the price. The property is located outside Lotta-Water Irrigation District; irrigation water is obtained from an on-site well and pumping system. The property is adequately leveled. County zoning in this area is AG (General Agriculture). The property is not located in a known flood hazard area.
Your market analysis leads you to the following conclusions:
Market Conditions Change (“Time”): Land values have increased at an annual compound rate of 3.6% for the last few years. No “time” adjustment is necessary for sale sales that occurred less than three months ago.
Property Size: Current land prices (after time adjustment) are 4% higher for each 40 acres smaller than 480 acres, and 4% lower for each 40 acres larger than 480 acres.
Leveling: Supplemental leveling cost has remained steady for the past three years at $220/acre.
Water: Land located in Lotta-Water Irrigation District sells for $345/acre more than land outside the district.
5. Flood Hazard: Land located in a known flood hazard area sells for 15% lower than land located outside a known flood hazard area.
SHOW YOUR WORK
2a. What is the indicated land only sale price per acre for each sale at the time of sale? Round to the nearest whole dollar.
Sale 1: $ Sale 2: $ Sale 3: $
2b. What is the land only “time-adjusted” price per acre for each sale? Round to the nearest whole dollar.
Sale 1: $ Sale 2: $ Sale 3: $
2c. What is the $/acre adjustment for size differences for each sale? Round to the nearest whole dollar. Be sure to include + or – for your answer.
Sale 1: $ Sale 2: $ Sale 3: $
2d. What is the $/acre adjustment for location (water district) differences for each sale? Round to the nearest whole dollar. Be sure to include + or – for your answer.
Sale 1: $ Sale 2: $ Sale 3: $
2e. What is the concluded land $/acre value for the subject property after making all adjustments? Round to the nearest $10/acre.
2f. What is the subject property value? Round to the nearest $10,000.