Gen AI is an emerging technology that has gone viral. But what actually is AI. The following was taken from a course offered by Coursera “AI Essentials”.
“To begin this AI journey, let’s start by examining what the term artificial intelligence really means.
In this context, intelligence refers to the human ability to perform cognitive tasks.
“As humans, we have cognitive abilities that allow us to make decisions and solve problems. However, there are also limits to how much information we can process at a time. AI is capable of extending our cognitive abilities, helping us to make better decisions and solve problems faster.”
“AI programs can assist us with tasks by using math to learn from data.”
“AI has the potential to greatly improve the quality of our work lives and streamline business operations. However, AI isn’t a magic solution to every business problem.”
Editor’s Note: Our Guest Post this week is Keith Wolf, SRA, AI- RRS, MS Data Science, Collateral Risk Innovation Manager at Freddie Mac.
Can Gen AI provide the support for an adjustment. Well like any other appraisal question it depends on the scenario. It also varies on the Gen AI being used. Is it an image or text development tool, mathematical or data science based. We also need to factor in the skills of the user.
Gen Ai is an excellent tool that can augment the appraisal process when it is navigated responsibly by the user. As a user we should be experimenting and learning as much as we can about Gen AI. It is everywhere, spam detection, targeted advertising, spell check, cybersecurity as examples.
Solving the “Support your Adjustment” paradigm is actually rather simple. The real problem is the legacy process of trust me; 3 comps and my judgement is all you need. Coupled with the lack of professional development education teaching appraisers’ data science methods that can be easily deployed in a Gen AI application by importing a data set and simply asking it to calculate the daily, monthly or quarterly rate of change in prices using “time Series” methods. Aka “Market Conditions, Time Adjustments, Mark to market”.
You can ask it to develop a similarity score based on property features, then bucket those into bundles of features that correlate to sale price. Then ask it to perform the time series on each bundle to demonstrate how prices are not static across different bundles of property features.
Depending on the AI used, it will produce the code used that includes all of the functions it called, provide the mathematical formulas, and explain what it did and why it may or may not be reliable. Paste that into your work file.
So, my answer is “It Depends” Gen AI is just a tool to augment the appraisal process used by the appraiser. It is not a magic bullet, don’t fall for the viral hype. It is your choice, dig the post hole by hand or use a power auger. Either way use the tool correctly.
Editors note:
We agree completely with Keith. “Magic” push-this-button solutions do not need humans. “We also need to factor in the skills of the user.” Yes.
Valuemetrics.info, georgedell.com, and the CAA are dedicated to appraiser analytic competence!
Gen AI and Excel macros can do the mechanics. Appraiser analytic skills are needed. Free webinars on the topic (YouTube) are available at the GeorgeDell.com/free-stuff page.