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Functional Obsolescence due to RR
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1/21/2013 at 5:15:05 PM GMT
Posts: 17
Functional Obsolescence due to RR

I have my own answer, but I am curious to know what your research has revealed in terms of property values in relation to an active railroad track. I would like to know percentage wise how it affects property values in your area.

 The property I am working on has a dwelling is about 112 years old and is across the street from a railroad track and is visible from the front of the house. I have no evidence of the railroad affecting the value of the residential property for this particular area.  The research I have seen is a 50/50 mix of affect or no affect.

 

 



1/22/2013 at 10:08:01 PM GMT
Posts: 14

Mark,

I did a study years ago with vacant land backing onto a railroad.  The results were up to 60% less for those building lots than on lots not by the railroad. I also did a study of home sales and lot sales backing onto major highways with and without sound walls.   The lot sales showed a big reduction in value backing onto a highway.  The home sales showed a reduction too, but no where near as significant.  Also, with house sales unlike the lot sales, my analysis would only be as good as the adjustments I had to make for the houses themselves.

 

Chuck




1/24/2013 at 1:23:59 AM GMT
Posts: 297

Here it is all about location. About 3 months ago I did an appraisal on a property in Belen, a small town south of Albuquerque. The underwriter was convinced that the RR track had to have a negative impact so I did a little extra research. Belen is a railroad town. When I inspected the property the owner proudly showed me the tracks at the rear of the property. Another property that backed to the tracks where the switch engine put the trains together had chairs in the back yard so they could watch them switch. The tracks run through the town. There is no difference between homes near the tracks and the other homes in the area. In Belen they love their trains.

There are other areas especially in the newer more expensive areas of Albuquerque where the tracks have had a negative impact. When the farm land was sold and subdivided the lots along the tracks sold last and sold an average of 30% lower. It is really hard to get a good handle on the impact of the tracks now because when the lots were developed the homes along the tracks tended to be smaller and slightly lower quality than the large expensive homes which were built in the rest of the subdivisions.  Originally with the land  it was the tracks, now it is a difference in size and quality.. On the smaller older (50+) homes the tracks have minimal impact.

 



1/25/2013 at 3:23:36 PM GMT
Posts: 19
I have found, like Chuck that the greatest impact on value appears when the land is ready and available for its HBU. Once improved the impact does not often become as significant.


1/29/2013 at 3:36:53 PM GMT
Posts: 17

I am sure you all have neighborhoods similar to what is here.  Thinking back 112+ years ago, many of the towns were constructed near the downtown area.  Of course what ran through the center of the town?  A railroad track. 

It is expected that if one buys a house that was constructed around that time period, within the city limits, that a railroad track would be present nearby.  I did not discount the value due to the railroad track, though the lender thought it was necessary.  Like you all, I certainly think it is in the land value, but try to find land sales in a dense residential area that began 100+ years ago. 

 

I haven't heard back from them so I guess it's ok

 

Thanks,



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