sevfiv Posted December 9, 2009 Share Posted December 9, 2009 This reads naïve as I type it but I wanted some input on HCAD valuations. One example is 1314 Texas, the Great Southwest Life Building, and the other a 1960s house in a neighborhood where land is expensive and new home construction is favored. That has given it the lovely "economic misimprovement" label, but the improvement valuation seems ridiculous to me. I know land values downtown and in the house's neighborhood are going to be high, the discrepancies in building value seem overwhelming. Is the office building not fully occupied or on its way "out?" And is the 2008 to 2009 change because of a break of some kind? I know the house is lived in and in good condition (and even if it was a trash heap, the heap would be "worth" more than $100). I know HCAD has its own quirky valuation methods but I feel like I'm missing something here... ------------------------------------------------- ------------------------------------------------- Link to comment Share on other sites More sharing options...
rbarz Posted December 9, 2009 Share Posted December 9, 2009 If it is a 4,000 SF tear down than the true value of the "improvements" would be negative although HCAD seems to list a lot of tear downs as $100. I couldn't imagine how many pages we could fill with HCAD discrepancies... Go by their offices during protest time and really get a fill for the numbers! Link to comment Share on other sites More sharing options...
SaintCyr Posted December 9, 2009 Share Posted December 9, 2009 Try the property at 12th and Yale... It should be condemned but they still value it as positive improvements. Link to comment Share on other sites More sharing options...
sevfiv Posted December 22, 2009 Author Share Posted December 22, 2009 The 2009 values came in (to be protested it seems) - I wonder if it will go down to $100 from $14,100: Link to comment Share on other sites More sharing options...
sevfiv Posted December 22, 2009 Author Share Posted December 22, 2009 Also, do you know the address of the building at 12th and Yale? Link to comment Share on other sites More sharing options...
SaintCyr Posted December 22, 2009 Share Posted December 22, 2009 Also, do you know the address of the building at 12th and Yale?1143 Yale Sthttp://www.hcad.org/records/details.asp?crypt=%94%9A%B0%94%BFg%84%8F%7F%7Bql%8El%87tXt%5BW%9E%99%A2%D3%89%95%C2e%7CU%89%85%86%C0%AB%A8%AD%86%5E&bld=1&tab= Link to comment Share on other sites More sharing options...
TheNiche Posted December 22, 2009 Share Posted December 22, 2009 I know land values downtown and in the house's neighborhood are going to be high, the discrepancies in building value seem overwhelming. Is the office building not fully occupied or on its way "out?" And is the 2008 to 2009 change because of a break of some kind? I know the house is lived in and in good condition (and even if it was a trash heap, the heap would be "worth" more than $100). I know HCAD has its own quirky valuation methods but I feel like I'm missing something here...The valuation of a property is an estimate of its sale price. If the sale price of an older building (based on comparable sales) is nearly the same as the sale price of land, then only the difference is attributed to the value of the improvements. It does not matter whether the improvements retain significant utility as evidenced by their ability to generate rent.Cases such as the ones that you pointed out are classified as economic misimprovements if the highest and best economic use of the underlying land is different from the improvements that actually exist on the property. It is triggered if the answer to the question "would a reasonable person rebuild the same thing on the property if it were vacant?" is negative.For instance, a cottage in very good condition that's in Bellaire and a million-dollar mansion in Lindale Park would each qualify, although their quantitative treatment would vary according to the specific case. Examples:The cottage (when protested, as everybody ought to be doing) would probably be valued at $100 (HCAD doesn't go any lower), reflecting that the preponderance of value is land...and if they wanted to be perfectly accurate, the costs to demolish the improvement to make the land useful (as is recommended by Generally Accepted Accounting Principles) would result in negative improvement valuation, but they can't do that.The mansion would be valued according to an estimate of its sale price, with improvement value reflecting the total valuation minus the land value, where the land value would be the same as throughout the rest of the neighborhood--so it could be built for $1,000,000 on $100,000 worth of land, but because it couldn't be resold for more than $550,000, the land value would be $100,000 and the improvement value would be $450,000.Is the office building not fully occupied or on its way "out?"Most historic structures are themselves physically or functionally obsolete. There are exceptions, of course, such as when they are substantially renovated; and even then there is typically a ceiling for financial performance that is quite a bit lower than a new Class A building (attributable to reasons ranging from higher insurance premiums to lower energy efficiency). No matter what was done to the Great Southwest Building, it will never rival the financial performance of Hess Tower or MainPlace. Link to comment Share on other sites More sharing options...
houston10 Posted March 14, 2010 Share Posted March 14, 2010 One thing as well in other states where sales prices are public tax values are more accurate. In Texas (where sales data is private) the government is basically guessing at values and they are often way way off. Link to comment Share on other sites More sharing options...
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