The other day I looked at 7 properties within 1 mile of the Club House. They were all smaller lots, in fill properties within otherwise fully built out portions of neighborhoods where the average age of the surrounding homes was over 30 years. The 10 lot shown in this video are about a mile or two further away from the Club House, still within the Alta Sierra subdivision, along Brewer Road, which is topographically defined by several year round creeks, a dozen seasonal drainages, a large long flat valley where Brewer Road cuts down the center of the valley, and the surrounding hills are extremely steep and filled with water courses that drain into the long valley where Brewer Road is located. All the properties in this portion of the subdivision present challenges to builders that require engineer for driveways and septic systems. All the easier to build lots have homes on them, some home owners have gone to great expense to build bridges and install culverts to make their property buildable. The large portion of undeveloped lots in this portion of the subdivision it itself an indication of the general difficulty and expense involved in developing these properties. That being said, the lots follow the general rule that the further you get from the golf course the large the lots tend to be, so most of these lots are one acre or more, and one of the properties in this group includes a collection of lots totaling over 13 acres that are being sold as single parcel. The explanation is in the video- The spreadsheet attached has all 17 properties I have reviewed in these two separate blog posts.
Conclusions- OK, so here is what becomes clear. You cannot just compare properties on the basis of the total acreage, the cost of developing the building envelope, the expected size of the building envelope, the location of the expected building envelope on the lot, and topographic viability of the lot are the real determinants of value. I hope this video and spreadsheet make that point clear. List price only measures the motivation of the seller, not value of the lot!
So are I have seen 18 properties for sale and comparing them straight across the board does not exactly give a useful measure of value because the lots as so different. However I am comfortable dividing the lots up into three different classes with a bit of overlap between them. If you look at the attached spreadsheet you can see how I divided the 18 lots into three classes and compared them only to other lots in same class. This classification can be further refined as I start to look at property outside the Alta Sierra Subdivision, but I wanted to start with this basic primer on land because Alta Sierra is microcosm of land in the entire county.
Of the ten lots I looked at today, only one was under one acre, that was the lot at 15788 Brewer with the water course right in the middle of the property. For all practical concerns this lot is untenable for use as a single family home, so for lots under 1 acre in size, my first pick is still the lot I looked at yesterday at 10847 Henson, .31 acres listed for $47,000. But you can’t really compare that with the much larger lots I saw today. In the second tier or size group, lots from about 1 to 3 acres, there were three properties I looked at today, all on Annie and none of them represented easy builds. One had the PGE power line and driveway so steep as to make it untenable without expense and engineering, one had no driveway but a serious water course encroachment that would cost tens of thousands to resolve (my listing) and one had evidence of a previous owner doing a makeshift grading plan where they build a driveway by pushing dirt into a water course, which will cost more to repair than if they had done nothing, and probably will cost five times the list price to make a viable building site. This information will be important in considering other lots that are roughly the same size outside of Alta Sierra, but I would not recommend any of these properties unless a buyer has a sophisticated understanding of the engineering challenges each one presents.
The third class of properties I looked at, are lots over 3 acres. So far I have looked at 7 of those. These lots are also the ones that are listed at the highest portion of the range so far, starting at $69,000 and going up to the most expensive property I have looked at to date, listed for $164,000 for the one property that is over 10 acres, at 16709 Brewer. It is this 3rd class of properties that requires deeper consideration. When purchasing a property over 3 acres the entire calculus of the development costs change. Not only do you have to consider how steep the driveway might need to be in relationship to the street, but there considerations about where on the property you can build a house. A larger property may not have a large building envelope, and what factors go into determining where you build almost certainly depend on your budget. What we can say is if you plan on building a 2000 square foot home that will cost you $200 per square foot to build, so your home is going to cost $400,000 and all the surrounding homes are valued at about $500,000, if you pay more than $100,000 total for the lot and development, you probably be better off buying an already existing home, which is why nobody is building homes on these lots! But say you want to build a manufactured home, and the home will only cost $250,000 to have installed. That allows you a much larger budget for development, but realize, development costs are never returned in increased value of the final home. if you spend $200,000 on your driveway it does not add $200,000 to the value of the home! In fact, a $200,000 driveway, if it is not done perfectly right, might work OK for you, as the home owner, but when you go to sell the house, the driveway that cost you $200,000 to install might actually cause a buyer to offer you less for your home. Things that cost on the front end of the development costs of a property are the worst for valuation purposes when you go to sell the property.
On properties over 3 acres there is tie, or a least a toss up between 12145 Rainbow, the 6.2 acre property that has the spring and a well, and needs a new culvert listed for $99,000 and the more developed property at 12357 Rainbow with 6.12 acres but already has the well, power, septic, and a building pad, listed for $142,500. The two properties are pretty equal in terms of what you get if you add the development costs the additional $40,000 you pay for the more expensive property is more or less equal to the development already included in the other property. I call these two a tie in terms of valuation, but both a better value than the other 5 lots are simply too expensive to develop or offer far a far less desirable building envelope.