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Counterintuitive as it may seem, free might be a bad thing.
We all know that free coffee tastes a little better. Free stuff is great. Cool finds along the side of the road…. superb! But maybe there is a limit. A tipping point that turns free into something less than desirable. A free subscription? Usually what it’s worth. Free haircut? Free dental work? Where’s the limit?
So what about free Architecture? I’m seeing far too much of it. Here’s what I mean:
For the last couple of years there has been an obvious trend to de-value all things real estate. Understood. But we have increasingly seen limits crossed that are affecting the future of design and preservation here in regards to unique properties.
Among others, appraisers seem to have a difficult time lately discerning good from bad, quality and thoughtful from common and low-cost. We’ve had a year of little to no added value from design and seriously, I don’t think that anyone really wants this to happen. It may make for a good buy as a purchaser, but this will eventually drive the interest in creating something lasting, something efficient, something beautiful, something improved, down to zero.
This nonsense is way beyond what really should be happening. I get that housing values have and will continue to adjust. But consider this analogy: one can buy a new base model Hyundai Accent for about $10K. A nice car: four wheels, two doors, gasoline engine. If you wanted something a little nicer you might choose a MINI Cooper S: four wheels, two doors, gasoline engine. The MINI would cost about $25K. Using current real estate logic shouldn’t they be worth the same? Er… no, unless you don’t care about the experience that comes with owning and driving each particular car… AND oh yes, re-sale values…
If all houses are now worth the same, and the same is equal to exactly the lowest possible recent sale, regardless of design, situation or condition, then we are unrealistically setting the bar too low. Value should be given for condition, design and desirability. Put simply, I love Formica as a material, but stainless steel plate makes a better counter in most applications. You should expect to pay for what you get, even if you are getting a discount.
If we continue to walk a path of all things are of the same values, then differentiation is lost. All creativity and care for design stops at some point. Think about it. No restored Haver-designed homes. Why bother? Why should I hire an architect to design a creative solution to enhance not only my life, but those who also experience and come in contact with it? No new designs that may help form sustainable solutions to living with our desert environment, no great civic places of pride.
I don’t think anyone wants to see a situation where there are no renovations beyond the basic. No high efficiency. No new landscape. Why choose one material over another. Standing seam steel instead of basic asphalt shingle? No. Why fix the roof at all? Why put in a tankless hot water heater or solar panel? And the biggest questions become what value design and architecture; what value preservation? This is how we lose iconic buildings. Or how we see the next wave of great architecture stay conceptual instead of realized.
Often we see appraisers (and lets be honest, more than few buyers) comparing the very best with the worst. The current climate seems to dictate that an unfinished home that sold as a short sale or foreclosure is the highest and best sale comparison for a restored or renovated home with new HVAC, solar panels, roof and landscape. Ridiculous, yet common. Not just apples and oranges. Apples with compared to a hollow shell of a cantaloupe left over from last spring’s harvest. How unfair is this? Well statistically about 18% of our market is distressed or foreclosure properties. So then should the remaining 72% be classified the same? The Lenders seem to think so…unless of course you are trying to modify YOUR loan or get them to accept a short sale on YOUR mortgage.
Buyers need help in understanding that they will still get an excellent value, and that well designed and detailed homes are deserving of a modest premium. Another auto analogy again: You’ve heard the story of the guy who answers an advertisement for a $100 Porsche to find an angry ex-spouse getting even. Awesome, he got an amazing deal off of someone’s misfortune. But that should not then set the price for each and every Porsche that’s for sale.
Appraisers, so cowed by Lenders, are bent on disproving value on any level when they should be focused on proving value. This approach has become so pandemic among appraisers, now typically ordered from “hands-off” pools that the come to appraise homes in areas that they have NO experience with, that the entire situation smacks of red-lining and conspiracy on the part of Lenders to FORCE higher equity positions for Buyers and to keep prices and values deflated. Why? Using only the lowest sales comparable effectively lowers the sales price below actual market values which lessens their risk…of course!
There needs to be some push back against this. And there is, albeit slowly. We are seeing a few Sellers, if they are in position to, say no to offers that don’t include some modest level of recognition to the effort and sometimes higher cost of good design. Many are abandoning the Market and deciding to stay. Many Buyers are now making slightly higher, more informed offers, or at least considering making up the down payment difference between a low appraisal and reasonable sales price.
The cap to this? There are signs are that the recession may be winding down, thankfully, and it will come faster than you think. Not today, sure, but our supply and demand will eventually resolve itself. We will wake up one day to find the era of short sales and distressed properties ended. Suddenly it will be too late to get free Architecture.
Yes, the era of free has descended. And you really can get amazing amounts of design and detail without premium. But not for long. Some will have had the insight to gain bragging rights for decades by acting with decisiveness. Others will have stories about what they COULD have bought but passed on. Along the way, we may have lost more than collective values. We may very well have lost a treasure of architectural legacies, both built and unbuilt. Sadly, because we forgot to add just a bit of extra value to creativity.