In Three Rules for Forensic Real Estate Damage Valuation: Deductive, Adductive, or Reductive Rule? (analysis)
real estate appraisal experts Wayne C. Lusvardi and Charles Warren
write:
Forensic Valuation: What Is It? Forensic real estate valuation is the application of economic principles and methodologies to answer questions of fact as to whether real estate values have suffered a permanent damage. Forensic real estate valuation contrasts with the prevailing valuation theory in the real estate industry that often fails to distinguish permanent loss from the following:
Situations Where Damages Are Impermanent or Non-recoverable
* The market has already provided "implicit compensation" for a pre-existing "foreseeable" condition (i.e., the "foreseeability damage test").
* The purported loss reflects the real estate market cycle.
* The loss was insured and thus recoverable.
* The loss is a brief, temporary loss of marketability.
* The loss was mitigatable or avoidable.
* The loss is speculative or stems from a self-interested claim of "stigma."
* Any diminution in value reflects a changed highest use of the property rather than full economic loss.
