Narrative Report Writing 5 - Presenting Economic Data

There are a number of ways of presenting economic data in a narrative appraisal report.   If you have a university or regional planning agency near by that reports on your area and its population, employment, housing, business activity / tourism and income that's likely a primary source of economic information for you. 

Some appraisers, who have good data from a government source can simply cut chart graphics and tables out of their government publications and paste them directly into their appraisal reports.  If the reports are not copyrighted, many government publications are not, its one method of getting the basic economic information that you need without having to collect it from multiple sources and then create you own tables and graphs.  If you have a single good data source then it's just a matter of discussing changes and trends for your reader.  If there is a copyright notice on the data that you would like to use, contact the author and ask for permission to copy the information into your reports.  Its likely that your reports are read by only a few individuals and if you advise the author of this very limited distribution you may get his permission to use it. 

When a single government data source is not available you may have disimilar formats or it may not be possible to simply cut and paste tables and chart graphics.  The available information may not appeal to some appraisers who seek a clean and uniform look, so creating tables and graphs in a spreadsheet program is another alternative.  It's time consuming work, but usually economic data only changes monthly and some data changes quarterly or annually, so the information doesn't have to be updated for every report.

When an appraiser moves from reporting on regional information to market area / neighborhood specific information a change in data source is usually needed.  Many appraisers use a zip code or multiple zip code area description and note it as being representative of a market area because extensive zip code information is published by the US Census. 

Usually everything from mean family income, population by age group, education levels, population by income breakdown to housing type are statistics available for any given zip code.  A zip code specific table can provide the detail that your appraisal report needs and it can be referenced in the appraisal's content as you described the market area / neighborhood.

There are also Internet based fee data sources that can provide appraisers detailed information on user defined areas, these data sources generally offer statistics on demographics within circular bands that extend out from and surround a subject property.  Its an elegant way of displaying information on the area surrounding a property but it's expensive for most appraisers. 

Remember that the presentation of economic (and social) data should be specific to the assignment and the clients needs.  In many cases the client does not want the "kitchen sink" but wants only an absolute minimum reporting, many want only data that directly affects the appraised property.  Yes clients want appraiser conclusions regarding significant trends but I have seen many appraisers include page after page of boilerplate economic data just because they have it.

While data sources are helpful, as appraisers, agents and market participants know there are a number of other important factors that affect market value, factors that are not described by basic statistics.  Most appraisers make an effort to provide additional market area details in their reports including; information on major employers, neighborhood amenities, recent and planned changes to the market, transportation and an opinion of what is anticipated for it. 

Economic data, if well presented, can impart to your narrative report reader important information about the environment in which your subject property exists.  If it includes many tables and chart graphics but the presentation does not do a good job of explaining what is going on in the region and the market area to the reader with regard to the subject then it has failed its purpose. 

For more appraisal information contact Glenn Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada appraiser who can be contacted via email or via his business website Appraiser Las Vegas  (http://www.appraiserlasvegas.com), or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/.  

Article source: http://www.appraisalarticles.com/Narrative-Report-Writing/4322-Narrative-Report-Writing-5-Presenting-Economic-Data.html