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Appraiser Said What? - Part 3: Freeway Noise

One of our missions at Follis Appraisal Services, LLC is to help inform and educate others' on how the appraisal process works, and in order to do so, I thought that I would start a new series for the blog where your questions are answered! I am still working on building our audience both on our website blog and also on our new Facebook page, so I sought the help of our local Association of Realtors to find out what questions other members in the real estate community might have regarding the appraisal process. Here are a few of their questions, and of course, my answers!

Q: Owner and managing broker of John L. Scott Real Estate, Paul Balzotti asked "How do you typically adjust for freeway noise? Say, not on the freeway, but something within a 1/4 mile of I-5?

A: This is an excellent question Paul! Interstate-5, which runs in a northerly/southerly direction from the Canadian Border in Blaine, WA, to San Ysidro, California and the Mexican Border, is a main arterial for travel in Whatcom County. For many, especially in the city of Bellingham, residential housing directly abuts Interstate-5, or is located nearby. I am often asked about the impact that noise from the freeway will have on the value of a property, and my answer is typically - it depends. This always seems to be the answer when asking about specifics in the appraisal of real estate, but it is unfortunately, the most accurate answer!

There are many factors that are taken into consideration when determining if an adjustment is warranted for freeway noise, such as, the location of the property, any impact on the use of the property (both interior and exterior), and primarily, what the market is currently reflecting for other similarly located properties. Freeway noise can be heard from most places in the city of Bellingham, but the impact upon marketability depends upon the proximity to the freeway itself, as well as any mitigating factors to help reduce the noise levels.

The Washington State Department of Transportation recognizes the impact from highway noise, and works to reduce it where possible. Find out more information about WSDOT noise walls and barriers here. According to their website WSDOT states:

Type two noise barrier projects

We build “retrofit” barriers along highways in neighborhoods that existed before noise abatement regulations were established.

The effectiveness of a noise barrier depends on the distance between the listener and the barrier. For residences located directly behind a barrier, the noise level will often be cut in half. This benefit decreases as a listener moves farther away and is negligible at distances greater than 500 feet.

WSDOT uses earth, concrete, wood, and masonry block to build noise barriers. Earthen berms work the best and are the least expensive, but a lack of available right-of-way usually makes concrete walls the most practical solution. Most often we build noise walls – free-standing walls usually made of concrete. The walls range in height from 6 to 20 feet, but normally are 12 to 15 feet tall.

Trees and shrubs can decrease highway-traffic noise levels if high enough, wide enough, and dense enough (cannot be seen through), but are often impractical. It would take at least 100 feet of dense vegetation to provide the same benefit as our smallest feasible noise wall. Trees do provide a visual shield and some psychological benefit. The Federal Highway Administration (FHWA) has not approved using vegetation for noise abatement.

Noise Barrier Wall
Noise Barrier Wall

Both of these photographs were taken by me during site visits to local Bellingham homes which abut Interstate 5.

The rear yard of two separate properties, one which had a noise barrier wall installed, and one that did not.

No Noise Mitigation

"For residences located directly behind a barrier, the noise level will often be cut in half."

So, what impact does freeway noise have upon residential properties? Over the past two to three years, with the accelerating market, extreme lack of inventory, and auction-style bidding, there has been little impact on the marketability of properties, regardless of their location. Buyers have been more concerned with finding a property that was in their price range, and less concerned with the features the property offered. However, with the uncertainty in the current market which buyers are facing, this may change.

There is no set "adjustment" that can be claimed for having a dwelling within X number of feet from the freeway. Adjustments are determined by analyzing recent sales of other properties with the same or similar locational influences. The primary method in determining whether an adjustment may be warranted is via "paired sales analysis". If you have two properties that are exactly the same with respect to all of the other features (structural size, bedroom/bathroom count, site size, covered parking, condition, quality, etc) and the only difference is the distance from the freeway, that difference in purchase price would equate to the amount an adjustment would be made for in an appraisal. The practical application of the paired sales analysis is a bit more complex, since there are so few properties which have the exact same features. Appraisers utilize additional statistical and data analysis methods to determine adjustments.

What does that mean for the public and/or the Realtors and agents who represent them? There is no definitive market value difference simply based on road noise; further analysis would be required, and would be based upon the market at the current time. Ultimately, buyers decide if they want to pay more or less for a property based upon its characteristics, and appraisers analyze the available data to discern if there is support for an adjustment.

Freeway noise tends to be one of those external factors that doesn't necessarily have an effect upon value, but does tend to have an effect upon marketability.

I hope this helps to answer your question Paul! As always, if anyone has any questions on this topic, or would like to ask a question of your own, please let us know!

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