Home value algorithms show consumers data with outliers, mortgage companies take the outliers out

A homeowner can look online to get an estimate of the value of their home but that number may not match what a lender computes:

Different AVMs are designed to deliver different types of valuations. And therein lies confusion.

Consumers don’t realize that there’s an AVM for nearly any purpose, which explains why different algorithms serve up different results, said Ann Regan, an executive product manager with real estate analytic firm CoreLogic. “The scores presented to consumers are not the same version that is being used by lenders to make decisions,” she said. “The consumer-facing AVMs are designed for consumer marketing purposes.”

For instance, more accurate models used by lenders do not include outliers — properties that sold for extremely high or low prices and that consequently would skew the averages and the comparable sales for a particular house, like yours. But models used by consumer websites, such as brokers’ sites and national listing sites, scoop in as much “sold” data as possible when concocting a valuation, because then they can claim to include all available data. That’s true, said Regan, but it’s more accurate to weed out misleading data.

AVMs used by lenders send along “confidence scores” that indicate how firm the estimate is. That is a factor typically not included alongside consumer AVMs, she added.

This is an interesting trade-off. The assumption is the consumer wants to see that all the data is accounted for, which makes it seem that the estimate is more worthwhile. More data = more accuracy. On the other hand, those that work with data know that measures of central tendency and variability can be thrown off by unusual cases, often known as outliers. If the value of a home is too high or too low, and there are many reasons why this could be the case, the rest of the data can be thrown off. If there are significant outliers, more data does not equal more accuracy.

Since this knowledge is out there (at least printed in a major newspaper), does this mean consumers will be informed of these algorithm features when they look at websites like Zillow? I imagine it could be tricky to easily explain how removing some of the housing comparison data is actually a good thing but if the long-term goal is better numeracy for the public, this could be a good addition to such websites.

Drawing artistic inspiration from growing up around McMansions

Artist Katherine Vetne builds upon a childhood spent around McMansions:

Vetne says her interests in exploring (and subverting) objects of status and consumerism started when she was growing up in Newburyport, Mass. She observed the differences between established “old money” and the newly affluent: A lot of the newer families built “McMansion” houses that looked like new versions of the town’s historic homes in an attempt to emulate that status.

Those experiences led to a unique form of art:

Vetne, 31, of San Francisco, has been building a reputation as a sculptor who works in an unusual medium: destruction. Vetne’s best-known work during the past three years has been a series of sculptures made from kiln-melted housewares crystal, which takes a distinctive, puddle-like shape when heated.

She then “mirrors” the melted crystal mass in a chemical process that turns the blobs into reflective objects. The pieces are presented individually or in big groups, like in her “Guilty Pleasures” installation that was part of the Catharine Clark Gallery’s summer show, “We tell ourselves stories … In order to live.” Ford and Vetne took the shopping trip at Clark’s invitation to find the raw material for a piece Ford recently commissioned from Vetne.

The idea of working with crystal, whether it’s fine Baccarat or more mass-market Avon, appeals to Vetne, who is interested in exploring issues of class, gender and materialism. “At the crux of my practice is the more middle-class people with some amount of resources trying to look ‘higher class’ than they are through the objects they acquire. I am interested in concepts of visual excess and how they’re supposed to communicate something. Usually, it’s ‘I have a lot of money.’”

Given the general reputation of McMansions, this is not surprising: take objects by which aspiring people try to build up their status and then destroy them to show what those objects are really about. Perhaps it would even be more shocking if an artist celebrated McMansions.

I’m also trying to imagine this destruction process applied to actual McMansions or parts of McMansions. Could a piece of performance art involve taking a wrecking ball to a McMansion? Or, imagine taking a two story foyer to a museum and showing it falling apart every so often, like the way “Concert for Anarchy” displays a piano in an unusual form. Or, take granite countertops and stainless steel appliances and destroy them.

Jell-O and “soul-killing suburbia”

A review of a new family history tells how the narratives links Jell-O and suburbs:

Jell-O might be the glistening dish of picnics and potlucks, but for Allie Rowbottom — a descendant of the Jell-O fortune — it’s both a burden and an abyss. In “Jell-O Girls,” she weaves together her family history and the story of the classic American dessert to produce a book that alternately surprises and mesmerizes. Despite its title, this isn’t a bland tale that goes down easy; “Jell-O Girls” is dark and astringent, a cutting rebuke to its delicate, candy-colored namesake…

“Jell-O Girls” could have easily devoted itself to the tragic fates of those heirs, or what the family called “the Jell-O curse.” A number of Rowbottom’s relatives succumbed to alcoholism and suicide. More money meant more money, but sometimes it also meant more to lose. A great-uncle who divorced and mismanaged his way out of his own fortune threw himself from the roof of a Sheraton hotel.

But Rowbottom’s interest is in the women of her title — namely, herself, her mother and her grandmother…

Jell-O, meanwhile, gets the full semiotics treatment, as Rowbottom shows how it went from a modern, scientific foodstuff to a relic of soul-killing suburbia. As sharp as her insights often are, this is a book in which Everything Signifies. Even a digression about the catacombs in an Italian monastery includes some Jell-O symbolism. You occasionally want to tell Rowbottom to ease up: Sometimes a Jell-O mold is just a Jell-O mold.

It would be interesting to read more about how this connection was made. At the least, I might expect to find:

  1. The rise of mass-produced goods, including food items, and suburbanization. Even as suburban homes went up in mass-produced subdivisions, the goods that filled these houses also often came out of an emerging mass-production economy. Cars, household appliances, furnishings, and food.
  2. The lives of women in suburbs. Numerous scholars have addressed the limited opportunities for women in many mass-produced suburbs as well as the numerous depictions of traditional family life in suburbs.
  3. The banality of Jell-O and the conformity and/or dullness of suburbia. Critics might argue the limited substance of Jell-O matches the boringness of the suburbs.

At the same time, if I had to create a list of consumer objects I would associate with suburbia, I do not think Jell-O would even enter my mind.

American dilemma: electric cars vs. trucks

Americans like to drive but it is unclear whether they will be driving electric cars or trucks in the future:

The auto industry is at a crossroads, with the future of legacy automakers like Ford, General Motors Co and Fiat Chrysler Automobiles NV uncertain as governments float proposals to ban internal combustion engines over the next two decades.

But in the present, consumer enthusiasm for trucks and sport utility vehicles is strong, especially in the United States. And that is providing Ford, GM and other established automakers with billions in cash to mount a challenge to Tesla…

Electric cars are money losers, which explains why global automakers have been slow to roll them out until now. But regulatory and consumer pressures are forcing established automakers to put more electric vehicles in their fleets over the next several years. In a cash-intensive industry, profits from pickups and SUVs may give them a competitive edge.

Ford said on Thursday that the average price of one of its F-series pickups rose $2,800 to an average $45,400 a truck in the third quarter. Sales of F-series trucks, which range from spartan work trucks to Platinum models with the features – and price tags – of a European luxury sedan, were up nearly 11 percent to 658,636 vehicles for the first nine months of this year.

This is not just a consumer preference issue. There are potential repercussions for the auto industry (a fairly large one), urban and transportation planning, tax revenues for governments, and a whole space – the suburbs – built around driving around. Oh, and many Americans seem to prefer driving larger vehicles and intertwining their identity and the related activities with these vehicles.

An official definition for a “smart home”

Two companies – Coldwell Banker and CNET – defined the smart home back in May:

Smart Home: A home that is equipped with network-connected products (i.e., “smart products,” connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.

In order to be categorized as a smart home, the property must have a smart security feature that either controls access or monitors the property or a smart temperature feature, in addition to a reliable Internet connection. It must also include at least two additional features from this list:

Appliances (smart refrigerators and smart washer / dryers)

Entertainment (smart TVs and TV streaming services)

Heating / Cooling (smart HVAC system, smart fans or vents)

Lighting (smart light bulbs and lighting systems)

Outdoors (smart plant sensors and watering systems)

Safety (smart fire / carbon monoxide detectors and nightlights)

Security (smart locks, smart alarm systems or cameras)

Temperature (smart thermostats)

An interesting list. I would assume some of this is driven by availability of technology as well as which features are already most popular with homeowners: security and temperature. After either one of those, everything else is less common and may be harder for consumers to imagine their value. Will people truly choose a home because it has smart watering systems or a smart dryer? We’re consistently told this is the wave of the future but it will take some time for all of this to become standard.

Additionally, we can continue to ask about what benefits to family life smart homes will bring.

“It’s part of the American identity to have a grill”

This is the final line in a story on grilling. Here are some updates on the American grilling industry:

Grill sales in America are growing only by low single-digit percentages each year, and the market is nearly 20% smaller than it was a decade ago, according to the research firm IBISWorld.

U.S. grill manufacturers — led by Weber-Stephen Products, maker of the iconic Weber grills — also face stiff competition from imports, which now account for 56% of U.S. sales, up from 46% a decade ago, the IBISWorld data show.

Grill sales are closely tied to changes in the U.S. economy, especially the housing industry. So, not surprisingly, the grill business was hammered between 2008 and 2010 when the housing crisis and severe recession took hold…

The Fourth of July is the most popular day of the year for outdoor grilling, with 76% of grill owners planning to fire up their barbecues on the holiday, the HPBA says. Those summer bookends, Memorial Day and Labor Day, tied for second place at 62%…

And in the heated debate between gas and charcoal, gas has the edge. Gas grills outsold charcoal grills, 57.7% to 40.1%. The remaining 2.2% of grills sold were electric.

Based on this article, then grilling is tied to the single-family home, the lawn and backyard, eating meat, and American holidays. Perhaps it is a symbol of having the leisure time to cook slowly outside. We can add the grill – perhaps the distinctive Weber grill in particular – to other consumer goods that supposedly symbolize the American Dream (McMansions, SUVs, large sodas, fast food, big TVs, etc.).

Yet, other people in the world use grills or outdoor cooking spaces. Are Americans really that unique in this regard? Bon Appetit takes a look at grilling around the world after this introduction:

For Americans, firing up the Weber and grilling up some meat has a distinctly patriotic vibe–we barbecue on the 4th of July, after all, and no image of the American Dream would be complete without a cookout-friendly lawn behind that white picket fence–but we’re not the only ones who pride ourselves on our skill with charcoal and tongs. From satay in Singapore to asado in Argentina, there’s a whole world of grilling out there. You can always find regional variations from city to city, town to town, and family to family, but here are some of the world’s great grilling traditions.

So, perhaps Americans just do the grilling in distinct ways: often in private spaces (backyards of owned homes) at particular times (summer holidays).

Self-driving semis to bring safety, limit unwanted jobs – and lower the costs of products?

Wired sums up some of the advantages autonomous semis might offer but leaves off a third possible advantages: cheaper shipping costs which leads to cheaper goods.

In 2012 in the US, 330,000 large trucks were involved in crashes that killed nearly 4,000 people, most of them in passenger cars. About 90 percent of those were caused by driver error. “Anything that can get commercial vehicles out of trouble has a lot of value,” says Xavier Mosquet, head of Boston Consulting Group’s North America automotive division.

So it’s no surprise some of the country’s largest freight carriers have in recent years started equipping their vehicles with active safety features like lane control and automatic braking. The economic case for these measures—the predecessors to fuller autonomy—is clear, says Noël Perry, an economist who specializes in transportation and logistics…

Another point in favor of giving robots control is the serious and worsening shortage of humans willing to take the wheel. The lack of qualified drivers has created a “capacity crisis,” according to an October 2014 report by the American Transportation Research Institute. The American Trucking Associations predicts the industry could be short 240,000 drivers by 2022. (There are roughly three million full-time drivers in the US.)

That’s partly because long haul trucking is not an especially pleasant job, and because it takes time and money to earn a commercial driver’s license. The shortage will get worse, Perry says, thanks to a suite of regulations set to take effect in the next few years. A national database to collect company-performed drug and alcohol tests will make it harder for drivers who get in trouble at one job to land another. Speed limiters could keep trucks to a pokey 64 mph. Mandated electronic reporting of hours driven will make it harder to skirt rest rules and drive longer than allowed. These are all good changes from a safety perspective, but they’re not great for profits.

Safety is good and more meaningful jobs might be helpful – though losing a bunch of driving jobs won’t look good to many. But, what about the added benefit of cheaper shipping costs in the long run? Perhaps it will take some time for this technology to become cheap and widely adopted. Yet, if trucks can drive themselves and drivers don’t need to be paid, can’t these trucks run all day long making runs back and forth? And imagine if they could utilize greener technologies as well, limiting fuel costs. Americans like their cheap consumer goods and having everything shipped by semi just a little bit cheaper on store shelves may help Americans enjoy self-driving trucks even more.