Recent presentations and articles on “Big Data and Appraisal” universally say that big changes in technology and analytics are affecting appraisal. What I don’t hear is: What can I do about it?
Will I be able to work in five years? Will our appraisal organizations be around? If there is a place for me, what do I need to do?
None of the articles show me what to do. The tell me: “be prepared;” “learn regression;” “use more advanced tech- and data-centric appraisal tools;” or “combine your traditional experience with more rigorous statistical analysis.” And many, many others just explain that if you just buy our product, all will be well. It is all easy. Easy. Just push the button and your appraisal are faster, better and wonderful. Well, if it were that easy, we could just hire non-licensed people to just push the button. Aw shucks, it’s an AVM. That’s what they do. In fact, it is dangerous for a USPAP appraiser to push the AVM button. What I read is that big data is a big deal — that will change everything. And I’d better be ready. I’d better be ready. Ok, I’m ready. But to do what? They are not telling me what!
So what do I do? What do we do? It appears that to survive, we must provide what is needed by future fate, not of steady past. It is the same, but different. What is the future? What is different?
It appears that our value is in three areas: 1) our knowledge of markets; 2) our ability to gather and improve data, and, 3) analyze the data into a value prediction. How can we improve our competence in each of these three areas — given the machines are gaining on us? Should we fight the machines, like we have fought AVMs and such in the past? Or should we partner up? The algorithm machines belong to no one. We can use them — or they can use them. Who takes charge?
So let’s look at how we can be in control of the three areas we can control: market knowledge, data wrangling, and computation analytics.
Market understanding is easily improved by the use of graphs, plots, and descriptives. Analytics software (like R)– specifically designed for visuals and summaries is readily available.
Data Wrangling includes identifying, cleaning, enhancing, and transforming data. These four elements change data into usable information. “If you get the comps right, it is hard to be far wrong!”
Computation means understanding and using reusable parts of the machine. These are called algorithms. Algorithms make models more accurate and reliable.
In sum – the ideal valuation of the future includes an SME (subject matter expert), with data competence, and computation skills. Computation means maximizing the brain-machine result.
The ultimate mission of this blog, and the Valuemetrics.info curriculum is to bring these three skills, and three types of scientific reasoning to the profession. The result is a truer and surer appraisal point value. But wait there is more! These methods enable additional products. Products and services best provided by SME’s. Experts like you. We will explain these additional appraiser income streams in future posts.
It is the goal of this blog, and our expanding curriculum — to match and exceed the needs of the market in the near future. It is survival. It is opportunity. And . . . it can be more fun.