It is no secret that the real estate market in South Florida is booming, but how has the surge in home values affected how residential properties are appraised? I asked appraiser Richard Pyle, who has served the Florida market for more than a decade, to explain how properties are appraised and how the pandemic has affected appraised values.
Q: What is an appraisal primarily based on?
A: An appraisal for a home is based on comparable sales within the subject's neighborhood. In the comparable selection process, an appraiser's goal is to select homes with similar features as subjects. Home features such as bedrooms, living area SF, lot size SF, etc… Variances to any features are adjusted for comparison. Final value is derived from the adjusted values of the comparables selected.
Q: Can appraisals vary depending on the appraiser? If so, by how much?
A: In general appraisal values will be similar no matter which appraiser is used. However, they may not match an exact dollar per dollar value. There may be slight variances as each appraiser chooses their comparables.
Q: How has COVID-19 factored into an appraisal – or has it?
A: These are definitely interesting times for appraisals when dealing with the coronavirus. In saying this, we would still select comparables from the subject's neighborhood. From my experience in the South Florida market, I'm seeing less homes for sale and in turn less homes to choose from during the comparable selection process.
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