How do you calculate real estate appreciation, return of an area, community or subdivision; 1,5, and 10 years?

Question

I am looking to buy a plot of land and I am trying to determine what I can expect for a rate of return. How much will it appreciate per year?

Answer 1

I am not sure where you live, but most every state has records of the value of property over several years.

Here in Kansas, and I can't imagine it would be much different in any other state, I can go to the county appraiser and find out the valuation of the property for the past several years.

You should be able to calculate the % of change in value from that.

However, you should note, that vacant land does not appreciate much over time, and often sells for less than its appraised market value. In addition, you have to pay taxes and keep the property maintained until you sell it.

I have seen building lots in older neighborhoods sell for 1/4 of their appraised market value.

Commercial land is totally different and its value is higher than residential property. Then it is location that determines the value or appreciation.

Farm land is different still. You can derive income from the property while it appreciates, but it appreciates much more slowly, unless the city is building out to the land. In that case, the type of land can be rezoned from agricultural to residential or commercial.

Answer 2

Very carefully!

Every area is different.

In So. CA, the market hit it's top in the summer of '05 and is still going down! Many neighborhoods are already down 15%+!

Consider that the average sales price in San Diego is appx. $570,000 and you get an average LOSS in value of $85,500 in just about 18Mos!!

The BIG question is will the dropping real estate markets in CA , Vegas, Boston Wash D.C. Fla, N.J., etc. spread to most of the US?

For a real 'insiders' view on this, I would suggest a real eye opener read at:
http://www.brokerforyou.com/brokerforyou
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