bubbleinfo.com

A couple of thoughts, our hauler, plus the wrap-up tour of the new house in Leucadia:

What look or style will endure the longest before being declared old and dated?

Hat tip to ProfHoff for sending in this update from sfgate.com:

From the wsj.com:

Jason Gonsalves worked hard to turn his 6,500-square-foot stucco-and-stone home in the suburbs of Sacramento into the ultimate grown-up party pad, complete with game room, custom wine cellar and an infinity-edge pool overlooking Folsom Lake. When interest rates fell recently, Mr. Gonsalves, who runs a lobbying firm, looked into refinancing his $750,000 mortgage. That’s when he got startling news—the home had dropped more than $200,000 in value while he was renovating.

Or at least, that’s what one real-estate website told him. Another valued the house at only $640,500. And these online estimates left him all the more confused when a real-life appraiser, assessing the house for the refinancing loan, pinned its value at $1.5 million. “I have no idea how those numbers could be so different,” Mr. Gonsalves says.

Right or wrong, they’re the numbers millions of consumers are clamoring for. After years of real-estate pros holding all the informational cards in the home-sale game, Web-driven companies like Zillow, Homes.com and Realtor.com are reshuffling the deck, giving home shoppers and owners estimates of what almost any home is worth. People have flocked to the data in startling numbers: Together, four of the biggest sites that offer home-value estimates get 100 million visits a month, with web surfers using them to determine what to ask or bid for a home, or whether to refinance.

But for figures that can carry such weight, critics say, the estimates can be far rougher than most people realize. Valuations that are 20% or even 50% higher or lower than a property’s eventual sale price are not uncommon, as the sites themselves acknowledge. The estimates frequently change, too—sometimes by hundreds of thousands of dollars—as sites plug new data into their algorithms.

Appraisers and real-estate consultants say the online models can veer off target with alarming frequency. Most data for the models come from two sources: records from tax assessors and listing data for recent sales. Collection is a challenge, however, because not every county tracks properties the same way—some calculate home size by number of bedrooms, others by overall square footage. And automated models aren’t designed to account for the unique construction details that often make or break a deal, or for intangible factors like a neighborhood’s gentrification. “You cannot use a computer model in certain areas and expect the value to come out right,” says John May, the former assessor of Jefferson County, Ky., which includes the state’s largest city, Louisville.

For all these reasons, models that banks use often add a “confidence score” to their estimates. Consumer-oriented sites, meanwhile, rely on disclaimers, some of which are eye-opening. Zillow surfers who read the “About Zestimates” page find out that the site’s overall error rate—the amount its estimates vary from a homes’ actual value—is 8.5%, and that about one-fourth of the estimates are at least 20% off the eventual sale price.

The sites argue that, over time, edits and corrections will help them perfect their numbers—with many fixes coming from their customers.

Zillow has accepted revisions on 25 million homes—perhaps the strongest testament to how seriously consumers take its estimates. Today, the site says its figures are accurate enough to give consumers a good sense of any home’s value. In the meantime, says Mr. Humphries, its economist, “We’re always tweaking the algorithm or building a new one.”

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Automated-valuation websites to check out:

www.zillow.com

www.cyberhomes.com – go to ‘Home Values’ page and input the address

www.homes.com – go to ‘Home Values’ page and input the address

https://www.chase.com/online/Home-Lending/home-value-estimator.htm

This house at the top of the hill in Leucadia has as good, or better ocean view as any you’ll see from homes around the coast – there is a marker on the street that memorializes the spot as the lookout point for enemy ships during the war!

Yet, this new house took five years to sell. Why?

Buyers aren’t willing to overlook the other negatives, and want the price to reflect.

In the last 12 months around the 92024, from sales of houses built since 2000:

Ocean View : 28 sales, avg. 3,556sf, have averaged $336/sf

Non-Ocean View:  81 sales, avg. 3,185 sf, have averaged $326/sf

Buyers will pay a little more for the ocean view, but, like in this case, want to properly value the small family room and freeway noise too.  Final tally here?  $325/sf:

We don’t know exactly how the survey was worded, but it looks like people would need to see their utility costs going up before spending money on improvements. From the latimes.com:

Homeowners need to complete an average of four energy efficiency upgrades, such as insulation or high-efficiency windows, to see their utility bills decrease, according to a new survey released Tuesday. Homeowners who completed only 2.3 improvements actually saw their bills increase 10% to 30%, according to the 2011 Energy Pulse Survey by the Shelton Group, a Tennessee-based marketing group focused on sustainability that polled 1,502 Americans. 

“[M]ost homeowners are more likely to start with a low-risk, low-investment improvement such as CFLs (compact fluorescent lightbulbs) or programmable thermostats that create a ‘quick win’ — fast results with minimal effort. Since quick wins reduce resistance and increase motivation, this should put them on the path to additional behaviors,” the study says. “However … many homeowners start and end with CFLs. The motivation to move on to the next activity doesn’t seem to occur naturally.”

Just 42% of the survey’s respondents had installed high-efficiency windows, 39% had added extra insulation, 37% had installed a higher-efficiency heating or cooling system and 24% had upgraded to a higher-efficiency water heater.

The No. 1 reason homeowners make energy-efficient improvements is to reduce their utility bills, the survey found. Yet the high cost and slow return on investment of the most valuable improvements has been a stumbling block. Replacing old, inefficient windows can lower energy bills 7% to 15%, but the payback period is between 10 years and 30 years, according to the study, citing Department of Energy research. Improving insulation can save 10% on an annual energy bill, but the payback period is 12 years to 26 years.

“The top energy-saving driver for the vast majority of Americans continues to be about dollars and cents,” said Suzanne Shelton, president of the Shelton Group. “It’s a green decision to save energy — but for consumers, it’s the green in their wallets that matters most.”

The highest-income and best educated Americans were most sensitive to utility bill increases and likely to take action. Those earning $100,000 or more annually said their monthly bills would need to increase an average of $113 to prompt an energy-efficient home improvement such as window replacement, whereas those earning less than $25,000 said their monthly bills would need to increase $120. Those with graduate degrees said it would take a $98 increase to trigger an energy-efficient upgrade, whereas those with a high school degree or less said the bill would need to increase $122, the study found.