Is Obsolesence Absolute or Relative?

[ZZGAMAZZ]

If you noticed the lack of a component that the market might consider relevant, then there's probably good reason to believe the market might consider that as well. However, at that price point: (1) it may be difficult to distill the impact that lack of such a door might invoke, and (2) the impact may be minimized by the overall price point. I'm guessing you found no sales of comparable properties with which to extract market behavior? Could also be a reflection of overall quality, no?

Well, yes & no both. The crux of the distinction is the term "that the market might consider relevant," there being no database from which one might extract pertinent info, probably including local market participants, e.g., realtors whose opinions would be based upon whether their listing is [or isn't] affected by that factor. The construction quality would indeed seem to be the most significant underlying factor, although coincidentally I blew up the aerial view of the subject property--in Santa Ana, CA--purposely to depict the homogeneous nature of hundreds n hundreds of local houses built circa 1950. Numerous properties throughout the local market are totally stoked out with recent improvements--most that affect market reaction even more so than the renovation cost--although the renovations are cosmetic--even more reason to consider the factor as non-curable--presuming because [as often in the case] I don't know whether the curable-noncurable distinction is based upon how reasonable it is to cure a factor, e.g., the "deep pockets" part of an equation. But yea, an earlier description of a "rabbit hole" is probably even deeper than I realized. Thank you as always. GM

 

[ZZGAMAZZ]

Functional deficiency

The older a property is, the more that functional obsolescence seeps in. On the cost approach, you would recognize a higher degree of functional obsolescence than the 60 y.o. house in the neighborhood that does have interior access to the garage - assuming that is your conclusion. But if you were appraising the 60 y.o. house in the neighborhood that does have interior access to the garage, functional obsolescence would also most likely be recognized in the cost approach to account for building characteristics that are not found in new construction (small closets, etc). So, functional obsolescence in this case is both relative and absolute.

So... is the market standard based upon current construction standards, or the market standard established by the majority of improvements, which in this market are defined by about 90% of homes built circa 1950 - 1960? [I'm asking from the Cost Approach perspective rather than just this scenario. Thanks very much.

 

[alebrewer]

I don't know whether the curable-noncurable distinction is based upon how reasonable it is to cure a factor, e.g., the "deep pockets" part of an equation.

I know you know this, but the distinction between curable and non-curable is whether benefit outweighs cost. I'd suspect it does at this price point, but you're the pro for this market. Again, though, I think any 'adjustment' for the lack of this component would be: (1) disingenuous or at the very least, not quantified, and (2) probably best considered as a component of overall quality.

 

[alebrewer]

To GoBear's point, if you developed the CA appropriately (not sure how that is even possible), then theoretically, the difference in the CA and the SCA could be attributable to functional obsolescence.

 

[Mark K]

Makes me literaly sick at my stomach to engage with mooks who have $$$$$ in equity simply because they had enough common sense to purchase a home in virtually Any Southern California market anytime in the past few decades except for a few years here n there.

What other capitalist phenomena makes you sick? How about lottery winners? Sounds like jealousy.

For the vast number of US citizens, the majority of their personal wealth is in their homes. My home is now worth about 10X what I paid for it many years ago. Sorry to upset you.

As to your first post, the C2C is a rounding error in that price range. Move on.

 

[Elliott]

OP said, "My original post noted that it might just be a subjective concern of mine, although the need to open the big vehicular sliding door after going outside the front door into the front yard in front of the world to get to the washer/dryer seems like such a PAI--although .... "

Possible 'cost to cure' would be to put a stacked washer/dryer inside the house (adjacent wall inside)l. But you may be overthinking the garage issue.

Here is what AI suggests:

"How to Think About It
Needing to manually move a large vehicle door and go outside to do laundry makes daily living less convenient and can be a safety and security concern, especially in bad weather or at night. It also signals that the garage and laundry were not designed with modern use in mind, which many buyers will see as a defect rather than a quirk.
Practical Upgrade Options
• Add a powered opener and keypad/remote to the sliding or overhead vehicle door so it can be opened from inside the car and house with minimal effort.
• Create an interior access path to the washer/dryer if structurally feasible (e.g., add a doorway from a hall, kitchen, or mudroom into the garage or a small laundry alcove).
• If interior access is impossible, consider enclosing a short, covered breezeway to the laundry area and adding good lighting, non-slip flooring, and weather protection so it functions more like interior space.
Negotiation and Valuation
• Treat the current configuration as a defect that will either cost you a future remodel or narrow the buyer pool when you sell; factor an estimated fix into your offer price.
• Get contractor bids for an opener, a new man-door, or a small interior laundry relocation so you can quantify the cost and decide whether the house is still attractive after those improvements."

Good luck.

 

[ZZGAMAZZ]

OP said, "My original post noted that it might just be a subjective concern of mine, although the need to open the big vehicular sliding door after going outside the front door into the front yard in front of the world to get to the washer/dryer seems like such a PAI--although .... "

Possible 'cost to cure' would be to put a stacked washer/dryer inside the house (adjacent wall inside)l. But you may be overthinking the garage issue.

Here is what AI suggests:

"How to Think About It
Needing to manually move a large vehicle door and go outside to do laundry makes daily living less convenient and can be a safety and security concern, especially in bad weather or at night. It also signals that the garage and laundry were not designed with modern use in mind, which many buyers will see as a defect rather than a quirk.
Practical Upgrade Options
• Add a powered opener and keypad/remote to the sliding or overhead vehicle door so it can be opened from inside the car and house with minimal effort.
• Create an interior access path to the washer/dryer if structurally feasible (e.g., add a doorway from a hall, kitchen, or mudroom into the garage or a small laundry alcove).
• If interior access is impossible, consider enclosing a short, covered breezeway to the laundry area and adding good lighting, non-slip flooring, and weather protection so it functions more like interior space.
Negotiation and Valuation
• Treat the current configuration as a defect that will either cost you a future remodel or narrow the buyer pool when you sell; factor an estimated fix into your offer price.
• Get contractor bids for an opener, a new man-door, or a small interior laundry relocation so you can quantify the cost and decide whether the house is still attractive after those improvements."

Good luck.

Thanks very much. If possible, if you have time, please try to explain for me, in layman's terms, how an entity such as ChatGPT can be familiar with the intimate details of esoteric issues like this. I became aware of the existence of AI very recently, amazed that ChatGPT is hand-walking me patiently through the process to address "Borland Database Exception Handling Errors" affecting every ACI report, for weeks, which ACI tech support has escalated to the ACI Development Team. Or like when ChatGPT tells me that "based on make, model, year, mileage, and symptoms," the parts store recommendation based on results of a diagnostic scan are not the right parts that I need. I'm not yet enamored of the concept to rely upon it to help resolve every unknown factor in life, although I can see how it might be tempting. So thanks for the info...

 

[ZZGAMAZZ]

What other capitalist phenomena makes you sick? How about lottery winners? Sounds like jealousy.

For the vast number of US citizens, the majority of their personal wealth is in their homes. My home is now worth about 10X what I paid for it many years ago. Sorry to upset you.

As to your first post, the C2C is a rounding error in that price range. Move on.

Always considered myself died-in-the-wool capitalist so yea the criticism is justified. But wow, 10X, congrats. How many years or decades to experience such a profound increase? Does being aware of the deep financial security affect your general decision-making? Does it positively affect your perspective about life in general? I'm curious because one sometimes wonders whether the lottery you mentioned would inevitably enhance the quality of one's life. But wow...

 

[Gobears81]

So... is the market standard based upon current construction standards, or the market standard established by the majority of improvements, which in this market are defined by about 90% of homes built circa 1950 - 1960? [I'm asking from the Cost Approach perspective rather than just this scenario. Thanks very much.

That is partially reflective of the reproduction vs replacement cost issue, but even more functional 60 y.o. homes would still have different room sizes, a different number of bathrooms, maybe a smaller garage vs. new construction. Out of curiosity, do you typically find the cost approach coming out higher than the SCA value without obsolescence?

This thread reminds me of my dad's house, which was built around that circa - he has this funky addition and a door from the bedroom to the living room through a closet.

 

[ZZGAMAZZ]

That is partially reflective of the reproduction vs replacement cost issue, but even more functional 60 y.o. homes would still have different room sizes, a different number of bathrooms, maybe a smaller garage vs. new construction. Out of curiosity, do you typically find the cost approach coming out higher than the SCA value without obsolescence?

This thread reminds me of my dad's house, which was built around that circa - he has this funky addition and a door from the bedroom to the living room through a closet.

Results without obsolescence, which usually pertains to functional recreational water features (approx 7% of total cost), or external based on location (approx 2% - 4% of total cost) vary depending on whether I'm able to determine the Opinion of Site value by market data--when the CA is usually lower than results of the SCA, although less than 20% of my assignments are in locations where vacant land is actively marketed--or extraction, when the results are similar, although the depreciation factor in my jaudiced perspective is just a guessing game that gives me poetic liberty to be what it "needs to be."