Religious Real Estate Appraisal

Church Real Estate Appraisal

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Typically, the valuation of church properties revolves around financing.  A group may need to add to and existing property, or propose the construction of a new facility, or the purchase of an existing church.  Sometimes the valuation involves a facility that has closed or is in foreclosure.  Most religious organizations have internal groups charged with financial responsibility for the church properties, and those groups sometimes need to value those properties. 

But not all religious facilities meet the needs of all congregations. Each church, synagogue, temple, mosque, or other worship structure must have improvements necessary for the needs of the congregation. It follows that some facilities are more valuable to some groups than other facilities because of those improvements.

One group may need large sanctuary to focus the congregation on preaching, while another with a focus on education would need a facility with classroom space. Others need a baptistery, and yet others need a baptistery facing a certain direction. Others have ceremonies involving bathing or washing, and thus a need for pools or tubs. Some have outreach for feeding the hungry, and need licensed kitchens to do so. Some need retail areas for bookstores or regions merchandise sales. "Value in use" is applicable when a particular building meets the specific needs of a specific congregation.

Some common religious improvements include:

Changing needs of Religious Facilities

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Construction of religious facilities in the US served many purposes over they years. In addition to their religious aspects, churches and other facilities served as meeting places for the community. Those other uses might have included schools, voting halls, and general meeting places. They acted as a focal point for the community, were residents could gather for celebrations, discussions of politics, or other important matters of the day.

Large quantities of new churches were constructed after World War II, as veterans returned from the war and had a need for housing. This housing moved into the suburbs, and with the new housing construction came churches and other religious venues. These churches were often brick structures with steeples and sanctuaries. A ratio of 10 SF of seating are to 30 SF of total GBA was common. Over time, as additional needs were identified, the churches grew.  These new needs often included administrative areas, classrooms, kitchens, libraries, and living quarters, which expanded the ratios.

Now newer facilities have campus like settings with numerous out-buildings.  These larger facilities require land for expansion, which often means leaving old properties behind, and building new improvements elsewhere.  

Decline of the US Church

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In study published in 2019, the Pew Research Center found that 65% of American adults describe themselves as Christian, down 12% points over the past decade. By contrast, people who describe themselves as agnostic is now 26%, up from 17% in 2009.

In the US, 43% of US adults describe themselves as Christian Protestants, down from 51% in 2009. Catholics were at 20%, down from 23% in 2009. Collectively, the Christian share of the population has declined, but the religious "nones" have grown across multiple demographic groups, included white, black, and Hispanic, and among men and women, and among college educated and those without college.

The data also shows a wide gap between Americans based on age. Eighty five percent of the Silent Generation, (born between 1928 and 1945), describe themselves ats Christian, while only 76% of Baby Boomers do, (born between 1945 and 1965). In contrast, only 49% of Millennials (born between 1965 and 1994. describe themselves as Christian. With each generation, fewer and fewer citizens claim a religious affiliation.

Religious Facilities by State

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Although fewer US citizens are involved in organized religion than in the past, there are still millions of people actively engaged with their church. Of those citizens that do participate in religious services, most attend a local facility. Other than a large mega church, most religious facilities draw members from their local market. As a neighborhood grows, the likely users will come from the neighborhood. People who practice their religion near their home usually practice it with local people who often have the same socio-econoimic background and values.

From a historical perspective, religion has been influenced by geography.   In general terms, Baptist predominate in the South, with Lutherans in the midwest.  Catholics have strongholds in the northeast, while Mormons are found in Utah and other Rocky Mountain states.   Although these are generalities, the demand for facilities and the type of facility needed often flow from these generalities.  

However, there is diversity in the US, and the immigrant community brings different cultures and forms of worship with them. Ethnic patterns among the immigrants are seen with churches like the Korean Presbyterian Church, the Asian Christian Church, and the Chinese Christian Church. Attendance at an ethnic church is more common with foreign born peoples than those born in the US.

Among Hispanics who were born outside the US and attend church, 7 out of 10 say that their place of worship offers services in Spanish (87%), has Hispanic clergy (82%) and is a mostly Hispanic congregation (71%). Among native-born churchgoing Hispanics, the numbers are lower on all three measures.

Current Religous Markert 

Although there are fewer people attending church, there are still millions that do, which insures a robust market for religious facilities for decades to come.