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be improper to determine Fair Market Value of a large block of real
estate on a market comparable method of single parcels of real estate
without applying a discount."
Mr. Shanker performed a four-factor analysis in reaching his
conclusion on the applicability of a 20-percent discount. He began
by analyzing the depth of the market. He stated:
Depth of the market can be described as the quantity of
transactions, interest in the properties, and potential
activity both on the buying and the selling sides of the
market. Depth is a product of many factors, including the
total amounts of properties, the breadth of distribution
among the general public and the overall activity in the
market. If the block is so large that it would be
difficult to sell over a short period, the application of a
market absorption discount is necessary to arrive at Fair
Market Value.
Mr. Shanker concluded that the applicable market at hand had a
"limited market depth" because the appraisers had to look outside the
Genesee County area to find data on comparable sales. Mr. Shanker
concluded that this factor was a "strong indicator" that a market
absorption discount should be applied to the subject property.
Mr. Shanker then analyzed the size of the subject property
vis-a-vis the total property in the market in terms of both the
actual number of properties being sold and the level of activity in
the market. He concluded that this factor favored applying a market
absorption discount to the subject property. He stated that the
apartment complexes totaled approximately 20 percent of the
comparable apartment market based on number of units. He stated that
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