Statistics can seem difficult and esoteric. Data Science is new. Each can be scary. We see traditional statistics as required material for the appraiser license. Basic inferential statistics have also been curriculum touted as “advanced” analytics for appraisers. Multiple regression, often thought of as a statistical method, is really a mathematical algorithm, which depends on […]
And what does cosmic cobra breeding have to do with valuation? (Part 1) Jeremy Bagott just sent me his new book.* It is about the joys of changing appraisal standards every couple of years. It’s about raising (then lowering) requirements for appraisers. And more. I’ve started to read the “Cobra”. Jeremy is an excellent writer, […]
We hear the word “technology” thrown around a lot. It’s a scare word. It gets attention. But what is it, and how does it affect our risk information industry? Technology can be defined as all the techniques, skills, methods, and processes used to produce a good or service or accomplish an objective, such as scientific […]
A cobra farm raises and sells cobras to the government, whose objective is to control cobras in the wild. OK, lets try this again . . . Jeremy Bagott, MAI, AI-GRS was our guest speaker at the 2nd annual meeting of the Community of Asset Analysts – in Oakland on October 28, 2020. Jeremy just […]
Do you follow ethical rules, or moral principles? How does human psychology play in? It is proven that appraisers’ opinions mostly match sale price (for loans). Justifications are: The price simply reflects an efficient market. The price lands inside Richard Ratcliffe’s “transaction zone”. (The principle here is that a real “most probable” value does not […]
In Part IV, we continue our quest for modernization of appraisal. In Part I, we clarified that an appraisal is an opinion. We figured out that opinions don’t modernize well! We also saw that market price may or may not be true value. And that clients of all types need more than a historic point […]
Believe or don’t believe. Is there a parallel between appraisals and how people respond to pandemic warnings? Appraisal reviewers decide whether an appraisal is “worthy of belief” (“credible”) or not. Similarly, people decide whether to believe in the need for public health orders. Steven Dinkin (president of the National Conflict Resolution Center) recently had some […]
There will soon be no need for residential appraisers. I remember years ago, doing education for my merging AIREA/SREA chapter(s) in San Diego. AVMs were just coming to our attention. I invited a MAI who happened to also be a PhD in economics, Phil Mitchell. The room was full. Someone asked about those “automated algorithmic […]
Data-driven is a buzz phrase. It can be useful. It can be counterproductive. “And in this corner we have . . .” It’s the appraisers versus the quants in the boxing ring. It turns out that people who are experts in a subject-matter field (appraisers for example) tend to discount the words “data-driven.” The experts […]
It’s not me, I’m not biased! Is it me, the model, or the data? A great problem with legacy appraisal is that bias is about personal bias, rather than analytical bias. USPAP (Uniform Standards of Professional Appraisal Practice) only addresses human bias. Similarly, The Appraisal of Real Estate by the Appraisal Institute only addresses analytical […]
Cognitive dissonance is the mental stress we feel when we’re confronted with conflicting beliefs and requirements. How could this possibly be a USPAP issue? USPAP, (Uniform Standards of Professional Appraisal Practice) may cause psychological dissonance in appraisers – because the review standards and practice standards have different requirements! For the appraiser, Standard 1-2(h) requires results to […]
Appraisers study some economics. Data training is “pick comps carefully.” AVMs use data. AVMs (Automated Valuation Models) usually use a lot more data, even dozens or hundreds or …. Appraisers usually pick six or seven comps, based on good judgment and training and experience. We are told comparables should be similar and competitive, so they […]
AVMs (Automated Valuation Models) have been around for over 20 years now. Appraisals have been around for 100 years now. Why no winner? Let’s look. This is the first part in a series of coming blogs that will compare and contrast “automated” versus “opinion” valuations. Stay tuned to hear the unexpected surprise climax of this […]
Why is the class called “Stats, Graphs, and Data Science?” It is easy to see statistics in data science, but why are graphs given importance? To answer this question, we must hear how data science sounds. Yes, it is a science, yet science includes judgment and subject-matter experience. And visualization. Data science comprises competence, computation, […]
Appraisals, AVMs, evaluations, Broker opinions, and “homeowner’s opinion” – valuation of any sort all have some things in common. The “new valuation modeling paradigm” is a term coined by Marv Wolverton, PhD, MAI (who authored the AI book An Introduction to Statistics for Appraisers). He created the term in a response to my peer-reviewed Appraisal […]