When doing an appraisal comparative valuation analysis, does your home or the comps have a road noise problem? That may be a needed adjustment (we provide a free appraisal comparative analysis sheet).
If a municipality conducts a mass appraisal, noise adjustments are often overlooked. As you can see below, that noise nuisance problem might deserve a significant valuation adjustment.
What if you live in a noisy location, would you think that a home is worth as much as a home in a quiet location?
A survey of noise levels from 13 studies covering 17 airports concerning noise disturbance levels to people was published indicating the following results.[1]
Low = 60-65 Ldn or decibels
Moderate = 65-70 Ldn or decibels
Substantial = 70-75 Ldn or decibels
Severe = 75-80 Ldn and above
For instance, a corner lot with a moderately dangerous intersection, increased traffic, and road noise, may be less desirable than a normal interior lot. That difference may merit an 8% or much more negative valuation adjustment.
However, other studies show a higher decrease in property value.
In a 16-page study Published in 2016 research was partially supported by the Intermodal Freight Transportation Institute (https://www.memphis.edu/ifti/) and Sparks Bureau of Business and Economic Research. They were done as part of The University of Memphis. This reveals the accurate monetary effect of load road noise on the value of real estate becomes proven factual evidence.
14% to 18% decrease in property value for properties within a 65-decibel reading:
The central estimates show a range of between a 14% to 18% decrease in property value for residential properties for being located within the 65-decibel contour. This contour is across the six crossings studied in the greater Memphis area.
Given the average home value included in the study of $116,472, this results in a decrease in property value of $16,306 to $20,965. When trying to place these findings in the context of other geographic areas, the frequency and duration of noise exposure should be considered.
When doing a comparative analysis, take into account “noise” adjustment differences in your comps. Using the Comparative Appraisal Analysis Sheet (that we proved to you for free as well as access to free comp sold date resources). Likewise, use either your subject properties’ noise adjustment or that of the comps needs to be taken into account.
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[1]Nelson, Jon P., “Airports and Property Values: A Survey of Recent Evidence,” Journal of Transport Economics and Policy, January 1980.
Noise Level Adjustment
Noise that is physically annoying becomes a quality-of-life issue. Obviously, unnecessary noise is stealing your right to quiet.
A halfway point of 16% can be used at a property tax reduction if your home was within the 65 decibels or higher range. For instance, if your property is located close to a major highway and you hear the road traffic from your front door registering 70 decibels. That diminishes the marketability of your property by at least 16%.
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What are the road noise disturbance levels and their effect on real estate and property valuation appraisals?
Road noise disturbance levels refer to the amount of noise generated by traffic on nearby roads and its impact on the surrounding environment. Evidently, road noise can have implications for real estate and property valuation appraisals.
Location and desirability: Properties located in quiet, peaceful areas away from busy roads are generally more desirable and tend to command higher prices. Buyers often prefer homes situated in tranquil environments with minimal road noise, as it contributes to a more pleasant living experience.
Reduced real estate market demand because of road noise:
Market demand: Properties located near high-traffic roads or highways may experience reduced market demand. Some buyers may perceive road noise as a nuisance or a potential health concern, leading to lower demand and potentially impacting property values.
Property use: The impact of road noise on property value depends on its use. Residential properties, especially single-family homes, and condominiums, are typically more affected by road noise than commercial properties. Buyers often prioritize quiet environments for their homes, making excessive road noise a potential negative factor.
Real estate market conditions, desirability, and noise reduction measures:
Perception of value: Property appraisals consider the perception of value within the local market. Appraisers take into account factors such as location, amenities, and potential drawbacks, including road noise. The impact on property values can vary depending on the specific market conditions, buyer preferences, and the overall desirability of the area.
Noise reduction measures: Properties equipped with noise reduction measures, such as soundproofing windows, fencing, or landscaping barriers, may mitigate the impact of road noise. These measures can help to maintain property values by reducing the disturbance caused by nearby roads.
It’s important to note that the effect of road noise on property values may vary across different locations, property types, and individual buyer preferences. Local real estate professionals and appraisers with knowledge of the specific market can provide more accurate assessments.
Use our DIY Property Tax Appeal Course for a property tax appeal. Prepare an appeal on the impact of road noise on property valuations in a particular area.
