Location Analysis
The evaluation of a property's position relative to surrounding land uses, transportation, employment centers, schools, amenities, and negative influences. Location is consistently cited as the most important factor in real estate value.
Location analysis in appraisal goes beyond the physical address to evaluate the property's position within its neighborhood, the neighborhood's position within the broader market, and specific locational factors that affect value. These include proximity to employment, schools, shopping, and transportation; views; privacy; noise levels; traffic patterns; adjacent land uses; and access quality. UAD standardized location ratings (beneficial, neutral, adverse) help ensure consistent reporting. Location differences are among the largest adjustments in the sales comparison approach and are often the most difficult to quantify precisely.
Related Terms
Neighborhood Analysis
The appraiser's evaluation of the area surrounding the subject property, including property values, market trends, land use, demographics, and external factors that influence value.
Adjustment
A dollar or percentage modification applied to a comparable sale's price to account for differences between the comparable and the subject property.
External Obsolescence
A loss in property value caused by factors external to the property, such as a busy highway, industrial proximity, declining neighborhood, or unfavorable zoning changes.
Market Conditions
The current state of supply and demand in the real estate market for a particular property type in a defined area.
More in Appraisal Process
View allScope of Work
The type and extent of research and analysis performed in an appraisal assignment.
Effective Date (Date of Value)
The date on which the appraiser's opinion of value applies.
Extraordinary Assumption
An assumption that is directly related to a specific assignment and, if found to be false, could alter the appraiser's opinions or conclusions.
Hypothetical Condition
A condition that is contrary to known fact but is assumed for the purpose of analysis.