How prices compound - 1352 Courtyard Drive, Charlottesville, VA

How prices compound - $359,000

A reader asked me to review this house.

At least for this house, we can thank the realtor for providing 27 photos of the property.  It is MLS #459549.

The builder bought the land (0.15 acres) for $59.9K in 2005.  It was a multi-transaction deal for 2 properties so I split the cost in two.   From the photos I estimate the construction cost with builder profit to be about $70/sq ft.  2,116 sq ft would be $148,120.  Total cost all in with profit to the builder would be $208.2K.

Here is how the prices compound:

1. When the builder bought the land it was over-valued.  $59.9K for 0.15 acres is close to $400K/acre!  Especially when right nearby you have Highway 64 and a train line in the background.  I would have only valued the land for $15K.
2. The first buyer bought the house for $304K in 2006.  That put an extra $100K into the builders pocket.
3. The second buyer bought the house for $335K in 2008.  At that price the seller was just trying to cover their costs of the home and the realtors cost.
4. They now have it on the market for $359K.  At that price the seller is just trying to cover their loan and the realtors cost.

It is assessed for $315K.

If you took out the realtor costs for both of the transactions and the extra $100K that the builder put in his pocket, and the over purchase of the land you would be back down to about $163K.  

I think it is worth somewhere between $163K to $220K.

Before everyone gets in an uproar about how much lower that is than what the assessed values are, I want you to look at how each time a pricing error is made, it gets passed down to the next buyer, and the next buyer, and the next.

Eventually you get to a tipping point that the mistakes cost too much, and the price has to be significantly driven down again.  Is it fair for current buyers to pay for the mistakes of previous buyers? 

What do you think?

Summary Information

Parcel Information Total Acres 0.1500 Primary Prop. Address 1353 COURTYARD DR Other Address N/A Property Card(s) 1 Lot 77 PHASE 4B Property Name N/A Subdivision Redfields Notes 06/16/2005 $119,810 FOR 2 LOTS TM 76R1-04-69 & 77  Subdivide Information  Deed Book, Page (1981 , 244 ) Conveyance ( ) Date of Sale (01/03/2001) Transaction, Date (200500366 08/21/2003) Owner Information Owner KALUPNIEKS, ANDRIS Address 1353 COURTYARD DR  CHARLOTTESVILLE VA, 22903 Owner as of Jan 1st KALUPNIEKS, ANDRIS Most Recent Assessment Information Year 2009 Assessment Date 01/01/2009 Assessment Reason Reassessment Land Value $95,000 Land Use Value $0 Improvements Value $220,800 Total Value $315,800 Most Recent Sales History Previous Owner SLAWSKI, DESIREE Owner KALUPNIEKS, ANDRIS Sale Date 01/28/2008 Sale Price $335,000 Deed Book/Page 3543/684 Validity of Sale Valid Sale Other Tax Information as of Jan 1st State Code Single Family Resid (Urban) Tax Type Reg. Taxable Parcel Level Use Code Single Family Primary Zoning Designation Planned Residential Develop Appraiser CRB

Improvements - Card 1

Improvements (Card Level Data)

Card Type Residential Infrastructure Improvements Public Water /Sewer  Whirlpool w/ Separate Shower  Water & Sewer - Jurisdictional Area Designation Primary Building Additions Garage, Attached Frame.....260 sq ft Patio, Aggregate.....336 sq ft Porch, Aggregate Floor.....30 sq ft Primary Building Details Comm. Section N/A Card Level Use Code Single Family Year Built 2006 Year Remodeled N/A Condition Good Grade B--- Number of Stories 2 Story Height (ft) N/A House Type 2 Sty Transitional Finished Sq. Ft. 2,116 Basement Type None Basement Garage Doors 0 Bsmt Fin. Sq. Ft. 0 Bsmt Tot. Sq. Ft. 0 Attic Type N/A Attic Tot. Sq. Ft. 0 Roof Material Dimensional Heating Heat Pump Cooling Central Air Fireplace(s) 1 Fireplace Type Gas Fireplace Wall Framing N/A Exterior Covering Vinyl Siding Bedrooms 3 Dining Rooms 1 Family Rooms 1 Full Baths 2 Half Baths 2 Total Room Count 7  (Every unit assumed to have kitchen and living room. Bathrooms are not included in total room count.)

Land Value Information

Land Value Information

Land Use Homesite 1 Acres 0.1500 Sq. Ft. 6534.0000 Rate $95,000.00 Adj Rate $95,000.00 Base Value $95,000.00 Adj Amount $0.00 Value $95,000.00

Assessments

Assessments

Year 2009 Assessment Date 01/01/2009 Assessment Reason Reassessment Land Value $95,000 Land Use Value $0 Improvements Value $220,800 Total Value $315,800 Year 2008 Assessment Date 01/01/2008 Assessment Reason Reassessment Land Value $95,000 Land Use Value $0 Improvements Value $253,100 Total Value $348,100 Year 2007 Assessment Date 01/01/2007 Assessment Reason Reassessment Land Value $95,000 Land Use Value $0 Improvements Value $244,700 Total Value $339,700 Year 2006 Assessment Date 06/14/2006 Assessment Reason New Construction-2nd Cycle Land Value $60,000 Land Use Value $0 Improvements Value $204,200 Total Value $264,200 Year 2006 Assessment Date 01/01/2006 Assessment Reason End-of-year Rollover Land Value $60,000 Land Use Value $0 Improvements Value $0 Total Value $60,000 Year 2005 Assessment Date 01/01/2005 Assessment Reason Reassessment Land Value $60,000 Land Use Value $0 Improvements Value $0 Total Value $60,000 Year 2004 Assessment Date 03/22/2004 Assessment Reason Division of Property Land Value $45,000 Land Use Value $0 Improvements Value $0 Total Value $45,000 Year 2004 Assessment Date N/A Assessment Reason End-of-year Rollover Land Value $0 Land Use Value $0 Improvements Value $0 Total Value $0

Transfer History

Transfer History

Previous Owner SLAWSKI, DESIREE Owner KALUPNIEKS, ANDRIS Sale Date 01/28/2008 Sale Price $335,000 Deed Book/Page 3543/684 Validity of Sale Valid Sale Previous Owner CRAIG ENTERPRISES INC Owner SLAWSKI, DESIREE Sale Date 05/18/2006 Sale Price $304,236 Deed Book/Page 3212/662 Validity of Sale Valid Sale Previous Owner REDFIELDS DEVELOPMENT CORPORATION Owner CRAIG ENTERPRISES INC Sale Date 06/16/2005 Sale Price $119,810 Deed Book/Page 3002/254 Validity of Sale Multi-Trans

Other Parcel Characteristics

Other Parcel Characteristics

School Districts Elementary School District Cale Middle School District Walton High School District Monticello Magisterial District & Voting Precinct Information Magisterial District Samuel Miller Voting Precint Country Green Census Information Census Block Group 1 Census Tract 112 Zoning Information Primary Planned Residential Development Secondary Unassigned Minor Unassigned Other Unassigned Proffered? Yes Natural Resource Extraction Overlay? No Flood Hazard Overlay? No Airport Impact Area? Yes Scenic Stream Overlay? No Entrance Corridor? Yes Comprehensive Plan Information Comp Plan Area Urban Area 5 Comp Plan Land Use - Primary Neighborhood Density Comp Plan Land Use - Secondary Unassigned Comp Plan Land Use - Minor Unassigned Comp Plan Land Use - Other Unassigned Land Use Survey Information Land Use - Primary Residential -- Single-family (incl. modular homes) Number of Structures - Primary 1 Number of Dwelling Units - Primary 1 Land Use - Secondary Unassigned Number of Structures - Secondary 0 Number of Dwelling Units - Secondary 0 Land Use - Minor Unassigned Number of Structures - Minor 0 Number of Dwelling Units - Minor 0 Other Information Subdivision Redfields MPO/CHART Area? Yes Traffic Analysis Zone (TAZ) 171 Jurisdictional Area Designation Water & Sewer Watershed Moores Creek Water Supply Protection Area? No Development Area? Yes Other Rural Land? No Ag/Forest District N/A Conservation Easement? No