Yes. Appraisal as we know it is dying.
Can it be saved? No.
So what should I do? What should “we” do?
To answer these questions, we need to look at causes and conditions. Some of these are obvious.
- Judgment is good; Analysis is better.
- Human generalization is excellent; Computation is fast.
- Good comps are good; Complete market data is optimal.
- Point value is understandable; Mathematical result distribution is not.
- A credible opinion requires belief; an analytical result requires scientific reproducibility.
The truths above are being embraced by our competitors.
- Accounting firms hire appraisers
- AVMs (Automated Valuation Models) get better
- Non-appraisers do “valuations.”
- Data providers provide analytics
- Programmers program solutions
The data has already been gathered. The analytics software is free. The pictures have already been taken. “Let’s Make a Deal!”
So what can we do?
So what can we do? If we cannot be saved. If computers are faster. If we have complete data. If we too have software. If we too can provide results instead of opinions . . . Leads to an obvious question: Can an experienced appraiser do these things as well as, or better than those others?
I believe the answer is yes. The answer is in the questions . . .
Analysis requires judgment. Human generalization is enhanced by computation. Complete data can be enhanced/cleaned as well as “confirming a comp.” A point value is an inherent part of a predictive value distribution. A documented, reproducible result is the most credible, believable answer.
An opinion requires “support.” A reproducible result is self-revealing.
The world needs an enhanced data stream. To survive, we can enhance the data stream! What a concept. Maybe it can even make appraisal fun again!
The world needs a point value. It also needs a reliability score. A distribution of probable value. An alternative fundamental value. (Not just a market price, twisted to represent real value). The world needs more from us, not a stronger defense of the old way of doing things. The world needs results, not more empire building. The world needs the result, not the opinion.
Is the profession dying? Yes. Is valuation expertise still needed? Yes.
We need a new vision. A new way. Happy New Year.