Opinion ID: 2358932
Heading Depth: 1
Heading Rank: 1

Heading: The Subdivision Development Appraisal Method

Text: The subdivision development method values undeveloped land by calculating what a landowner could expect to realize from selling individual lots, taking into account development costs and discounting future revenues to present value. 48 S.W.3d at 180. The Court notes that the Appraisal Institute's approach involves the same analysis: estimate the gross sales of lots from a hypothetical subdivision of the subject land, subtract the costs of marketing and development, and discount the cash flow to arrive at the present value of the property to a willing developer-buyer. 48 S.W.3d at 181, n. 1. In describing Patterson's appraisal technique, the Court acknowledges that Patterson applied the subdivision development method but then claims that his method is only broadly similar to the Appraisal Institute's approach. 48 S.W.3d at 181, n. 1. However, the Court does not explain how the Appraisal Institute's approach is any different than Patterson's approach. Rather, the only distinguishing factor is the Court's referring to Patterson's approach as Patterson's subdivision development analysis. In any event, any approach to the subdivision development method uses evidence about the actual sales of individual lots to establish raw, unimproved condemned land's market value. Thus, the subdivision development method is significantly distinguishable from Texas' traditional appraisal methods. As the Court notes, the subdivision development method differs from the comparable sales method because it requires the appraiser to examine ready-to-build, subdivided lots-lots that are not comparable to the landowner's larger, unsubdivided condemned property. 48 S.W.3d at 183-84. Further, as the Court explains, the subdivision development method is unlike the income method, because it is based solely on the speculative piecemeal sale of unimproved property. 48 S.W.3d at 184.