What is “Modernizing”? What is “Appraisal”? This is the first in a blog-series to look at “modernization” from the viewpoint of the appraiser analyst, and not the view of the client-user report. In the valuation world, the word “modernizing” has been commandeered by the GSE’s (FannieMae and FreddieMac) who give it a particular meaning. Primarily, […]
Appraisal regulations are like a multi-dimensional board game. Regulations regulate process. Process results affect everyone, including: Quasi-governmental organizations (Fannie/Freddie/App. Foundation) Non-appraiser valuators Homeowners Taxpayers Veterans Lenders Valuation affects everyone. It touches on racial/minority bias, wealth transfer, homelessness, family values, and even mental health. Many aspects of appraisal process still follow the data-context of old history. […]
Ai, Artificial Intelligence, needs guidance, the right questions, the right prompts. How does judgment-based appraisal work with Ai? Or does Ai work better with algorithms? Appraisal is defined as an opinion, or developing an opinion. Defined as worthy of belief (“credible”). Data Science (DS) is defined as systematic study by an expert in scientific methods […]
Does this (in-process) Congressional Act prevent or cement bias-vulnerable appraisal practices? [The Appraisal Industry Improvement Act (S.1635) was introduced on May 7, 2025, by Sen. Kevin Cramer (ND) and co-sponsored by Sen. Ruben Gallego (AZ).] Traditional, legacy appraisal practices were developed in ancient ‘paper data’ times. Simply put, the process was: 1) pick some “comps”; […]
We hear noise in appraisal work on trend analysis, time adjustment, and “market conditions.” These overlapping terms are related but often mixed in their use. Lack of clarity/definition is perplexing! The confusion may be explained by: Lender/investor goals may vary. Modeling differences in “signal vs. noise.” The relevance of seasonality depends on intended use. First, […]
Flag waving and appraisal. Huh? The Fourth of July is a day celebrating the anniversary of national independence. Appraisers are supposed to be impartial, objective, and independent. The new nation wanted independence from a King. Appraisers are to be independent of all the other participants in the real estate deal: buyer, seller, listing agent, selling […]
Is appraisal based on science? No. It’s an “opinion of value.” Yes. It’s a systematic method to learn about something. Looks like it’s both! – – – But wait! Is every opinion based on science? No. Does every method result in an opinion? No and no. So now we know how to talk about this. […]
And why are statistics and “data-centric” thinking suddenly a big deal? First, we need to know what data-centric means, and what statistics are needed. Here, we talk about what data-analysis tools and methods are needed to know, not clever academic mumbo-jumbo stuff. As many of you may know, I have spent the last 20 years […]
“Practical” means useful and sensible. And it should be somehow better than what went before. Artificial Intelligence learns from experience, recognizes patterns, and understands language. Today, most AI applications are “narrow,” in that they are intended to solve particular problems. For appraisal, this means formulating the problem, gathering relevant data, prediction, and presentation. Ai depends […]
The CAA was formed for a single purpose: to provide valuation professionals with a better way to serve the public trust. This, through evolved technology and contemporary knowledge of data analytics – that are based on economic principles and human behavior theory. We share open-source software solutions customized for best practices, which are evolving opportunities […]
The AI (Appraisal Institute) is experiencing pain. But it’s the result of sickness, instead of the growth pains of advancement. Why? As noted before, organizations tend to die due to one of two causes: Failure to respect its original, declared mission Failure to adapt to changing conditions. In the past, it was a world of […]
RStudio is an open-source user interface, designed for data analysis. It is not R. It does interactively access base R and other software such as Python, and has many packages which specialize on data collection, analysis, maps (GIS), graphs (ggplot2), and are used for managing appraisal assignments. Time Adjustments: Click here to access the 21 […]
An organization can decline in one of two ways: 1) Failure to keep to its original mission; or 2) Failure to modify its direction in the face of change. The Appraisal Institute is the historical 1991 merger of the AIREA (American Institute of Real Estate Appraisal) and the SREA (Society of Real Estate Appraisers). Each […]
Why are adjustments a problem? The concept is simple. How does a typical buyer react (with a number), to a particular feature? For example, it seems to be easy to judge a person’s reaction to a house which is, say, 15% bigger. Economists use what is called a preference function to analyze this. This concept is […]
Time adjustments were often performed after other adjustments, particularly in upward trending markets, according to the December 2024 FHFA Working Paper. Editor’s Note: Read the entire series (so far) here. Some appraisers were avoiding time adjustments, unless needed for another purpose! That purpose is when the appraiser couldn’t match the user-lender’s expectation of value (an “underappraisal”). […]
