Hawaii is looking better and better to appraisers these days, especially as record snow storms strike large parts of the continental United States. Who can blame them for wanting to sit on the beach and collect among the highest fees in the nation, in a location that also happens to be one of the busiest as well?
Sure, if you look at the county map below there are slightly better fees to be had in Alaska, Wyoming, and other rural areas. But those locations are much lower volume and in many cases share a common attribute: A harsh, sparse environment, which generally leads to less competition and more add-on fees for acreages, long drive times, and the like. “Harsh” is a term rarely used in the same sentence as “Hawaii”.
But all levity aside, it’s clear that there are sweet spots in the national county matrix which lead to a great combination of consistently high fees plus high volume, which are visible if you look at the top 50 Counties chart (PDF). In it, we’ve shown the top 50 counties by volume, sorted descending by average fee. In each column, the green cells are the top 10 performers in that category (out of the top 50) and the pink cells are the bottom 10 (again, out of this group of 50 only).
The 50 counties shown represent 34% of the total volume analyzed in the AFR, which is understandable given national population patterns.
But volume alone won’t create a great environment. Just look at Scott County, Iowa. It ranks dead last among the top 50 in average fee, and is in a state ranked sixth from the bottom (See the Average Fees by State (PDF) ). And even in a low-fee state, the county manages to have an average fee that’s just 91% of the state’s overall average. Perhaps worst of all, the relative standard deviation percentage, or RSD%, is among the 10 “best”, meaning that the fees are tightly clustered around that very low average.
That’s why, in the “Range Low” and “Range High” columns, Scott also falls in the very bottom group. It starts with the lowest average, and then adds or subtracts a very small percentage for its range of values. (The range is the average fee plus or minus one standard deviation.)
At the other end of the spectrum, note that Honolulu is not only the highest average fee, but it also ranks in the best RSD range as well. That means fees are high, and very consistently so. Compare that with the counties right below it, Montgomery County, MD and King County, WA, where the average is high too, but the RSD is so high as a percentage of the fee that you’ll often see base URARs ranging from the upper $200’s to the lower $500’s. In Honolulu, you’re pretty much guaranteed that the base will be from the upper $400’s to the lower $600’s.
In the middle of the table, not surprisingly, you see solid, stable markets that are busy but with characteristics mirroring the national trends.