As a local appraiser, people are always asking me, “How much is a square foot of land worth in Portland, Oregon?” This is a difficult question to answer in general terms because every piece of land is different and Portland represents a large metropolitan area. However, we can explore some relationships that relate to property and its value, as well as examine the average trend in median land value as site size increases.
Properties with smaller lots that are closer to the center of Portland (or that are located in desirable parts of the City) will generally have a higher price per square foot. As the lot gets larger or the location moves out from the center of Portland, the value of each additional square foot of land will typically become less valuable, unless there are other factors like usability issues or external influences. The relationship holds true as long as the lots are just becoming larger yards or “surplus land” and do not represent additional building lots or “excess land”.
When we do a typical home appraisal in Portland, we estimate the vacant land value and then we also estimate the contributory value of each additional square foot of surplus land so that we can make adjustments to the comparable sales. This process is done on a market area and property-specific basis. For example, if our comparable sales only range from 5,000 to 8,000 square feet in site size, we then focus only on sales within that range to estimate our site size adjustments.
So, you still want to know a general answer to how much is a square foot of land worth in Portland, OR? Okay, here we go, but the following information is in general terms and should not be applied to any one particular property.
The following search was performed on the RMLS for vacant land in Portland from 3,000 square feet to one acre:
The range of the search results are from $28,000 to $575,000. The median land sales price is $120,000 and the median site size is 0.17 acres (7,405 sf). This is roughly $16 per square foot. Remember that this figure is the total median price of a lot and if we added or subtracted a small amount of site area (added yard space or took away yard space), that would not change the value by $16 per square foot.
Simple linear regression suggests that for each square foot of site size, value increases on average by $1.65 per square foot. Remember that this is just an average and does not necessarily apply to one particular property. For some of the higher priced, close-in neighborhoods with small sites, our appraisers have seen land value increase by as much as $10 per square foot of surplus land and other less desirable areas where there is almost no measurable difference in small changes in site size.
A straight trend line is shown in this site size regression for simplicity, but it would be more accurate to show a curved line. This is because each additional square foot of land is usually worth a little less than the one before. For example, it would be rare for a property around Portland with five acres to sell for $1.65 per square foot or $71,797 more than a property with four acres. The average relationship of $1.65 per additional square foot of land only holds true for this set of data and within this range below one acre.
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