Tuesday, April 19, 2005

Getting Reappraised: Malls As Analogical Referents

I may spend a lot of time in malls, but I hate them. They constitute a necessary evil, but that's the best thing I have to say about them. In spite of my mall-aversion there is one way that I find them useful: for appreciating the recent reappraisal of our property.

Granted, comparing rises and falls in the value of commercial property to that of residential property is largely a study of apples to oranges. But sometimes my analogical imagination runs a little wild when I try to get my mind around what assessors do and how they draw their conclusions.

The property value of our house is assessed at about +7-8% from 2004-2005. I guess that's good, even though it may mean more taxes for us next year. But I really need a neutral economist to tell me exactly how good (or bad) it might be.

I do not have a neutral economist at my beck and call, but I do have a Tennessean article from April 11, which reports a big drop in property value at Hickory Hollow Mall. So, that will have to do; and it is more than enough for my analogical imagination to draw its own unruly conclusions.

Keeping in mind that our residential thousands are not a commercial real estate's millions, I have to say that I am glad that our reassessment does not look like Hickory Hollow's. We have only owned our home for 7 months, but its assessed value has increased at least one percentage point for each month we owned it. That's good, right?

On the contrary, Hickory Hollow's decrease in value represents the largest decline of any commercial property in the assessor's latest mass reappraisal effort. I would hate to have suffered the largest decline of any residential property ever, so I am blowing out a big "Whew!" and I am counting us fortunate.

But I'm dealing with malls, so my analysis is not nearly superficial enough. I may not always have a deep grasp of economics, but I can paddle around the shallow end of the pool. So, let's just take this discussion of value to the shallowest level of cosmetic vanity possible.

In contrast to Hickory Hollow, the value of The Mall at Green Hills has grown 7%, the value of Rivergate Mall has grown 8%, and the value of 2525 West End has grown 9%. I am glad that my appraisal numbers look like those of the latter three malls. Why? Because the times I have been in Hickory Hollow, it seemed pretty "old school" as malls go. It seemed somewhat dark, cavernous, and boxy with lots of empty space where shops used to be. Both Rivergate and Green Hills are light, airy, and seem to be at capacity. 2525 seems to be the World of Tomorrow of malls with its gleaming brushed metal and faux marble structure.

So, I am relieved that my reappraisal is more like that of Rivergate, Green Hills, and 2525 than that of "Hick-low." I am pleased that my residential property is in the same stylish, à la mode company with the former and that it is in no way comparable to "old school" malls, which must deserve their depreciation for not staying trendy and hip.

Oh, and I suppose I am glad that our house increased in value, even if it is not a mall.

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