Wednesday, June 1, 2016

Appraising in Lancaster, PA

Lancaster Pennsylvania is known for many things, agriculture is just one of them.  I was born and raised in Washington Boro, PA and grew up on a farm.  Since my Grandfather started farming, there have been everything but hemp grown and raised on the family farm.  I now live in Kentucky and own Bluegrass Valuation Services which is an appraisal business.  My family and I still vacation in Lancaster, and on a recent trip I saw something that we never see in Kentucky.

Coming to the farm we usually pass Central Manor Church of God and start to get the feeling of coming home.  On a recent visit, as we merged onto Bluerock Rd, and passed the church, I noticed something odd, there was a homestead missing.  The above photo is now ALL cropland.  As an appraiser, this immediately reminds me of the principle of Highest and Best Use (HBU).

Highest and Best Use uses 4 tests to dictate what a property should be used as: legally permissible, physically possible, financially feasible, and most profitable.  Appraisers usually see a progression of property moving from vacant land, improved land, residential, commercial, industrial, etc.  We seldom see this pattern reverse because it follows the profitability usually,  In the above property, agriculture was a more profitable use, therefore break out the bulldozer!  I will admit that this is extremely rare especially in areas with demand for housing.

Well that's about all for now.  Thanks for reading and stay tuned for upcoming news...