10.4. SR 05-02-2016 - Laserfiche WebLink

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City of Elk River Land Analysis April 18, 2016 Page 6 DEVELOPMENT LAND SALES The purpose of this consultation was to investigate land sales in order to develop average fair market values of residential development land in the City of Elk River. The average market value is necessary for the City of Elk River to complete their review of park dedication fees and determine if modification of the current fee structure is needed. The sales comparison approach is the preferred, and most common, technique for developing a market value estimate for land. Typically, the sales comparison approach compares vacant land sales to a subject property. However, in this case, there is no specific subject property. As such, no adjustments are made to the comparable sales. In general, the sales selected for analysis are unplatted land, or land defined as outlots reserved for future development. However, in some cases, previously platted land is included that was replatted for a higher density use. As a group, the comparable sales are expected to indicate a range of unit values established by informed buyers and sellers in the marketplace. The average market value can then be utilized as a reasonable estimation of average fair market values for land in Elk River, thereby meeting the guidelines of Minnesota statute. Sales of land in Sherburne County and surrounding areas were researched using the Appraisal Data Network database, Northstar Multiple Listing Service and the REDIComps database. Information has been sought on recent sales of parcels that are similar in terms of potential use consistent with the residential zoning categories within the City of Elk River. The search for development land sales focused on unplatted land and outlots in outer -ring suburban areas that closed after January 2013. It is noted that the regional market lacks a sufficient number of recent sales of medium - density residential land for an adequate analysis. This is likely due to the abundance of townhome developments prior to the recent housing recession. While townhome units are gradually being absorbed by the market, developers have so far been hesitant to produce more of this property type. Further demonstration of the lack of demand for townhome units is that the lowest indicator, Sale 6, a bank sale, is actually pad -ready platted lots. Givent that single-family development is typically allowed in medium -density zoning PATCHIN MESSNER DODD & BRUMM Valuation Counselors