A room with a view
Real estate view attributes and their valuation significance on discounts and premiums.
A view is the scene or prospect visible from a specific location viewed from a site or property which may affect the value of the site or property.
Broker’s marketing brochures and conventional wisdom suggest that view attributes can significantly influence the value of real estate.
Market studies furthermore support the premise, concluding in addition to square footage and lot size, view is the most significant determinant of home value.
To the point, it is stated that the property’s physical characteristics ‐‐ views – must be considered when evaluating a property value.
Views that tend to command a value premium may be scenic: lake, mountain, river gorge, desert, ski slopes, natural areas, or golf courses. Other vistas that confer value may be symbolic: specific landmark structures (buildings, bridges, 1000 La Gauchetière, e.g.), or urban skylines. Sometimes views are distasteful, diminishing value and requiring negative adjustments or discounts in the price evaluation process: highways, rooftops, vehicle salvage yards, high voltage lines and other utility infrastructures.
The amenity afforded by a view is not only characterized in terms of the vista’s object (lake, building, bridge), but also by how well the object is seen. A panoramic view (breadth and/or depth in aspect) tends to command the ultimate premium. In some contradiction, a near view of a prized view object is preferred over a far view, while the ability to see a far distance is prized over a vista that is foreshortened. Other things being equal, an obstructed (or keyhole) view will draw a lesser premium. While an amenity, a view only visible from the upper floor of a single family residence likely draws a lesser premium; the upper‐floor view, however, is the norm in a high‐rise apartment or condominium building. A damaged view (a mountain view marred by overhead power lines or a junkyard in the foreground) will likely invoke a lesser premium.
View orientation can influence value. It is said that the view from the “back” of a residence (where family rooms and patios are often located) is significant, while the view from the front door is less significant. In most cases, we address the view attribute in terms of the view outside or beyond the subject property, as observed from the subject property.
Context may determine whether a view is a positive or a negative attribute. A downtown skyline is often a prized view, and proximity to neighboring high‐rise office buildings is an expected and acceptable prospect from a high‐rise residential condominium unit. A multi‐story office overlooking a suburban backyard, however, is not.
Specific View Types
While view attributes can lend a premium to some commercial property, such as office and lodging properties, the appraiser most frequently encounters the view issue in the context of appraising residential property. In some residential subdivisions, virtually the only value‐influencing land attribute is view, as this amenity contributes to peaceful enjoyment of one’s domicile.
Urban high‐rise residences (condominium, apartment) are especially sensitive to view attributes. Units on the higher floors in a building ‐‐ with more expansive views that are less obstructed by neighboring structures ‐‐ will usually command higher sale prices / rents than similarly‐oriented units on lower floors in the same building. In the urban context, view quality may be further influenced by unit orientation. A panoramic view of the highway flanking the Central Business District may be less desirable than the same‐height panoramic view of the lake and greenbelt that run through town.
Though only 20% – 40% of property owners in golf course developments reportedly play golf, golf‐course‐fronting properties typically draw a premium. While the view attribute is one of the amenities enjoyed by a golf‐course‐fronting property, the utility of golf‐course frontage (proximate access) is inextricably entwined with this frontage; and this adjacency may be impossible to differentiate with the value influence of the scenic attribute. Non‐adjacent properties in the same subdivision that view the golf course will tend to sell for less than the golf course lots; and non‐adjacent properties without views in the subdivision will tend to sell for even less than the ones with golf course views.
Similarly, it is difficult to extract the portion which is view, and that which is due to proximity for waterfront properties. The same adjacency that may provide the property owner with immediate water access also provides the view amenity. Non‐waterfront properties with water views will tend to sell for less than waterfront properties; and the non‐fronting, non‐view properties will tend to sell for even less than those with views.
Valuation Issues
Discovery of view attributes often presents challenges for evaluation. Most view attributes are not well‐identified from aerial imagery. Topographic maps are helpful, but are not informative as to view obstructions presented by trees or buildings. Even on‐site inspection may not be determinative if observation is blocked by buildings, fences, or houses. Without interior building access (or a marketing brochure mentioning the view), second‐story views are easily missed by the appraiser.
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