Real Estate Valuations and Appraisals


Apparently the general public has changed its minds about once often desired and sought amenities. Builders are recognizing that they can’t focus on these amenities in their advertising and must make adopt different architectural designs.
Now, the following are not etched in stone. The opinions that are contained herein were spoken at a recent home builders conference. So, if you have one of these, don’t despair. There still is an appreciation for them but the demand is likely quite soft and the dollar return has dropped dramatically.
Outdoor Kitchens and fireplaces– Not all climates are conducive for one of these. An outdoor kitchen in Alaska and the Northwest may not be useful for a long enough time to be reasonable and financially accept- able. Grills today are larger and more complete and much less expensive than designing and installing an out- door kitchen. Outdoor fireplaces also are falling into disfavor. Fire pits are more reasonable and accomplish the same goal as did the substantially more expensive fireplaces.
Sunrooms- Sometimes called three (3) season rooms are falling out of favor as recognized by builders. One can realize, however, that these rooms have a place in certain climates and they may still provide the personal lifestyle of many in the warmer climates. However, they are expensive and add to the property tax conse- quence which is above and beyond the cost. Also, the method of attachment may impact the operational costs of the house creating an even greater expense. In this economic time additional costs are not seen as accept- able by many markets.
Two Story Family Rooms– These never made any sense. It was merely an “I have arrived” statement for those who were free wheeling yuppie minded people during the great economic times. For all the right reasons, they were never a wise decision. The resonance screeching through the house; the energy loss for both the cold and hot seasons, and the cost to finish the upper level which serves no functional purpose. Also many taxing authorities consider that additional living space. Those that succumbed to this unwise decision are the ones complaining about energy costs and increased prop- erty taxes. If they need someone to blame, they should find a mirror.
Media Rooms– Builders perpetrated a fraud on the public with this one. A true media room is built for one purpose which is to watch movies and play games on a big screen. They are acoustically designed, have huge video screens and all the entertainment attachments one would expect. They can cost $35,00 ++++ depend- ing on seating, room design and size and quality. Yes, a true media room is a de- light, but a very expensive in-house toy. Now, the builders capitalized on the craze and in the “mc-mansion” developments they added an additional – typically on the main level and called it a “media room”. Many of them even had windows and lacked the privacy factor a real media room must have. Some how, they convinced this “mc-mansion” public that this really was the real thing. What they really created was an extra room to heat, cool and maintain which truly provides no functional utility. A finished basement is infinitely a much better investment.
Luxury Master Baths- By the way, are you aware that the federal government says that you can’t use the term Master Bedroom or Bath? In its infinite wisdom it is considered discriminatory and infers the old time master of slaves. This is the height of political correctness gone terribly awry. Any how, luxury bathrooms are not as acceptable today as 5 to 10 years ago. The cost is astronomical and if you think about it all you can do is get washed and use the toilet just like a normal non[-luxury bathroom. But, there were those who believed they had to have it. I’ve often wondered how many times do you invite someone into your bathroom???
Formal Living Rooms- The movement today is to a great room attached to a kitchen and yet providing conver- sational seating. Formal living rooms are really an 18th century concept. When formal entertaining was the thing. Today, society doesn’t see their home providing that type regality. So, they are really passé’.
Spa Tubs- Most Often referred to as “Whirlpool Tubs”, which is a specific brand name which has been recog- nized as generic. Per the editorial director / home for Better Homes and Gardens magazine, the movement is to stand-alone tubs, in classic or contemporary styles. Back to basics is obviously the key.
Now, what is the public looking for in 2012? Comfort and convenience. Larger closets, better designed laun- dry arrangements and larger sized areas; more functional and well equipped kitchens, electronic charging sta- tions on each level of the home, security systems, effective outdoor lighting for aesthetic and security reasons and functional outdoor entertainment areas but not outdoor kitchens.
The problem with these writings is it is often interpreted as immediate fact. They are not. And, many are in- sulted that they now have what “nobody” wants. Not true. The decisions for these were made at a different time. The decisions were sound at the time, not pretentious decisions. Presuming the opinions of those who set forth the above, are correct, then the values of these amenities will diminish. They very likely will go the way of having only one bathroom and railroad rooms. These were dictates of past generations of homeowners. And those referenced herein and others may be perceived as the railroad rooms and the like in the coming times.
HOUSING STARTS- According to Calculated Risk, a finance and economics blog of Mr. Bill McBride, housing starts increase in many areas are positive for the GDP and employment. We all likely agree with that. Per the article the level of starts is still paltry but ahead of 2009—2011. But the starts are anticipated to be up 20% over 2011 and it is expected that they will double in the next few years.
It is stated that starts for single unit dwellings are on pace with anticipated 500,000 for 2012 and all residential starts are on pace with the expected 730,000. These numbers are up from 431,000 and 609,000 respectively from 2011.
On the following page is a chart which reflects the housing start movement since 1969 with designated reces- sion periods. It is very interesting if you take the time to analyze the movement with regard to the U.S. eco- nomics. The bottoms are hit after a recessionary period. It appears that we are bottomed out and the recovery has begun. This recovery seems as strong as those of the 1073 to 1977 downturn and the 1989 to 1993 ones. The status quo of the most recent recovery 1994 to 2007 indicated that there wasn’t enough economic positive impacts, hence the decline of 2008 to 2011.
Much of recovery is in the minds of the public. Once can also see the impact these numbers may have on the elections. Consider the political impacts at each of these economic turns. This may give many a clearer un- derstanding of the dramatic affect elections have on the lives of the American public. Let us hope the political results of this year’s elections will be positive and allow the already beginning recovery to gather more steam and bring us back to prosperity.