As a commercial appraiser in the great State of Kentucky, part of my job is to analyze local economic trends. We've all seen the ghost towns in rural areas as the population migrates towards more urbanized areas of the state. Needless to say, this trend wreaks havoc on the value of the commercial real estate left behind. Conversely, some less … [Read more...]
Real Estate Trends in Louisville, Kentucky
If you're not using statistical analysis to identify trends, well, you should be. Speculate all you like about what's going on in the market but the bottom line is mathematics. I remember one teacher stating that statistics was developed to evaluate probabilities within the gambling industry. No surprise there. In case you weren't aware of it, the … [Read more...]
Economic Snapshot of Kentucky Counties Based on Three Demand Generators
Employment, Population, and Income, collectively known as demand generators, are all fundamental forces of demand and key measures of the economic health of a region. Changes in these three categories affect the demand for various types of real estate within the market. For some time I've wanted to create a map to visualize which areas of Kentucky … [Read more...]
Financially Feasible Rent Level Analysis
Calculating Economically Feasible Rent Levels In my previous post, I discussed the task of quantifying economic obsolescence or benefit that affects real estate. As I noted, the first step to evaluate the impact is to calculate the level of rent at which development of specific property types is financially feasible. Doing this requires knowing … [Read more...]
Measuring Economic Obsolescence or Benefit
What is Economic Obsolescence or Benefit? Say what? I'm sure that will be the response of some reading the term 'Economic Obsolescence' for the first time. Just stay calm a second and I'll explain. Basically, obsolescence is a word that describes the state or process of something becoming obsolete. Think eight track tape players or rotary phones. … [Read more...]
Using Multiple Linear Regression to Appraise Real Estate
Those of you who took statistics in college probably remember the class with varying degrees of fondness. Personally, I loved my statistics class. I realized at the time that multiple linear regression was the perfect tool to quantify the effect of various property characteristics on the overall value. The theory of statistics is the mathematical … [Read more...]
Commercial Appraisals: Art or Science?
An appraisal is an opinion of value derived from the market. The three major methods used to formulate an opinion of value (the cost, sales comparison, and income approach) each relies on data derived from the market. Broadly, various elements of comparison are extracted from market oriented transactions, compared with the property under … [Read more...]
Website Recommendation – The Content Squad
On rare occasions in life we encounter a company that is...exceptional. I rarely do this (I'm not sure if I've ever done this) but I would like to recommend The Content Squad for those of you in need of a website. My contact there is Wayne Cox - my former pastor. Anyhow, if you want to deal with someone who cares about what you need and someone … [Read more...]
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