You are appraising a 460-acre irrigated farm with a current valuation date. Improvements contribute $350,000 to the
Question:
You are appraising a 460-acre irrigated farm with a current valuation date. Improvements contribute $350,000 to the property value. The property is not located within an irrigation district; all irrigation water is obtained from on-site wells and related pumping systems. The entire property is well leveled. County zoning for properties in this area is AG (General Agriculture). The property is located in a known flood hazard area.
Market Data
Sale 1: | 540 acres sold recently (2 months ago) for $7,370,000. Building improvements contributed $500,000 to the price. The property is located in Coldwater Irrigation District; all irrigation water is obtained from Coldwater 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 located in a known flood hazard area. |
Sale 2: | 460 acres sold 1 year ago for $6,310,000. Building improvements contributed $275,000 to the price. The property is not located in an irrigation district; irrigation water is obtained from on-site wells and related pumping systems. 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 3: | 420 acres sold 3 years ago for $6,045,000. Building improvements contributed $405,100 to the price. The property is not located in an irrigation district; irrigation water is obtained from on-site wells and related pumping systems. The property was well 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 2.8% for the last few years. No “time” adjustment is necessary for sales that occurred less than three months ago.
- Property Size: Current land prices (after time adjustment) are 5% higher for each 40 acres smaller than 460 acres, and 5% lower for each 40 acres larger than 460 acres.
- Leveling: Supplemental leveling cost has remained steady for the past three years at $370/gross acre.
- Water Source: Land located in Coldwater Irrigation District sells for $1,500/acre more than land outside the district.
- Flood Hazard: Land located in a known flood hazard area sells for $1,000 per acre less than land located outside a known flood hazard area.
a. What is the indicated land only sale price per acre for each sale at the time of sale?
b. What is the land only “time-adjusted” price per acre for each sale? Round to the nearest whole dollar.
c. What is the $/acre adjustment for size differences for each sale? Round to the nearest whole dollar.
d. What is the $/acre adjustment for flood hazard differences for each sale? Round to the nearest whole dollar. Be sure to include + or – for your answer.
e. What is the concluded land $/acre value for the subject property after all applicable adjustments (not just those in 6b thru 6d)? Round to the nearest $10/acre.
f. What is the subject property value? Round to the nearest $10,000.
g. Neatly show and label all of your work showing how you arrived at your conclusions. Add additional worksheet(s), if necessary.
Discrete Time Signal Processing
ISBN: 978-0137549207
2nd Edition
Authors: Alan V. Oppenheim, Rolan W. Schafer