The two ways to underwrite land appreciation give answers about 40% apart

Putting a number on expected appreciation for a 26 acre parcel in an exurban county produces two answers that do not reconcile. Method one is the county trend. Pull fifteen years of vacant land sales the county publishes, throw out anything under 2 acres and anything over 200, and a median price per acre compounding around 5.1% a year falls out, with two flat stretches and one 2021 spike that distorts everything. Applied forward over a ten year hold, the parcel goes from $4,100 an acre to roughly $6,750. Worth noting that about a dozen states do not make sale prices public at all, so this method is simply unavailable in some places. Method two is a land residual from the developed ring. Nine miles closer in, finished lots trade around $78k. Builders generally say they can pay somewhere near 20 to 22% of finished lot price for raw ground before entitlement and infrastructure. That implies roughly $15,600 per lot equivalent whenever the ring reaches the parcel, and at about 2.2 lots an acre net of roads and detention that is a far bigger number than $6,750. It says nothing at all about when. So the trend method prices continuity and the residual method prices arrival. A carrying cost of $1,180 a year does not care which one is right. Everything hinges on whether the ring actually reaches nine miles in a decade, and there is no defensible way to estimate that from either method. Which basis do you actually underwrite on, and if you use both, how do you resolve them?