Albemarle Land Value
I was snooping on the Albemarle web site and found the Assessor’s information. If you’ve never been there, it is a little scary to see your personal information there. I was hoping to find my 2008 assessment, but only the 2007 data is available. I was a little creeped-out by the personal information on the site, but I was also curious. I decided to peak at the assessed value of the property owned by well-know local celebs.
One of the great things about our community is that we leave our celebrities alone, so I will not mention the name. It really does not matter who this is, but I found the assessment to be a bit off. The property was a large, old home on nearly 200 acres. The assessed value of the house (and other improvements) was substantial, but the assessed value of the nearly 200 acres was only $236,000. The land was listed as being in a conservation easement, so I would expect that the price be below normal land prices, but under $1500 per acre sounds VERY low.
What a deal! I believe that these “conservation easements” are the only way to go if you own a large piece of land that is either not really useable or is not accessible. Consider some of the Blue Ridge that is in easement…
Comment by Charles McDonald — January 17, 2008 @ 4:02 pm
I did some spot-checking, and it appears that in Albemarle County, as is the case in most places, land values are low relative to building values. Buildings do not appreciate, unless they are made primarily of some material that is both prized and no longer available for some reason. They depreciate, at about 1.5% per year. They can never be worth more than the cost to recreate them today, less depreciation.
Land, however, increases in value. Centrally located sites tend to appreciate faster, unless you’re seeing new infrastructure being installed on the fringe.
I’ve rambled. Sorry!
Commercial investors love being able to depreciate their buildings, to save on income taxes and improve their cash flow. And assessors tend to oblige them by valuing the buildings as, say, 80% of the total value of the property. But the reality is that an older building in a choice site may really only be 10% of the total property value. And in the case of a teardown, the building should be 0%, or even a negative, since it costs to remove it.
Conservation easements are a fine thing, as long as we’re talking about land on the fringe, and the easement is permanent. It means that the owner can’t subdivide and make a huge profit. But I’ll bet that the land is still undervalued, and that even with the conservation easement, there is a market for that house-plus-200-acres that far exceeds the assessed value, and that strikes me as unjust.
My specification about the land being on the fringe is to the point that once a town expands to the point where that 200 acres is in the middle of things, a private entity shouldn’t be getting a tax break for keeping that land unused. It should become a park, available to everyone, not one fellow’s private enclave in the middle of a healthy metro area, just because his great grandfather got the conservation easement — and not subject to being sold for a huge profit that the seller or his ancestors did nothing to earn! The community creates that value, and it should be reclaimed by the community.
Comment by Wyn — January 19, 2008 @ 8:35 am
More spot checking of sales is really interesting. There is both a “land market” and a “land use” figure for some of the transactions. What is the significance?
Comment by Wyn — January 19, 2008 @ 9:07 am