Judgment vs. Data. Computer quants vs field experts. Each thinks they have a better hammer. “Experts” think the quants are hammering screws. Quants think the experts have their eyes closed. Both have sore thumbs. Judgment Here, in part 2 we will look at the field-related expert, excelling in experience and judgment. In part 3, we […]
Judgment vs. Data. Computer quants vs field experts. Each thinks they have a better hammer. Quants think the experts have their eyes closed. “Experts” think the quants are hammering screws. Both have sore thumbs. Better In part 2, we considered heuristic analysis which focuses on mental efficiency to help make judgments and decisions quick and […]
Bias, We Got it Handled? We got standards, we got smarts. And we have issues . . . This is the second of a series asking questions and seeking answers about bias in valuation. Part One is here. President Biden proposed to “establish a national standard for housing appraisals.” The purpose is to ensure adequate […]
A year ago, in a land free of enemy Covidians, the topic was the failed resolution. We suggested a new attitude and new way to tie intent to results. Simple. Do yesterday to change today! Then know that today becomes yesterday in a blink. Blink. So today we suggest certain steps. These involve unlearning (as […]
In this time of New Year’s resolutions, bias has been much in our consciousness. Bias Pt 3. As a new appraiser, I knew little about bias. I did know that appraisers were expected to be unbiased in their opinions. It seemed simple. Be fair, and don’t let anyone bribe you to give the ‘value’ they […]
Opinion is the required end product of appraisal, mandated by the quasi-governmental regulations. By “appraisal waiver” exception, analytic results may be allowed. (No opinion is necessary.) modernized Editor’s Note: This post is an intersection of Appraisal Modernization, Part 6 and Bias Part 5 The FHFA (Federal Housing Finance Agency) wants input on: Appraisal modernization; Data […]
A great deal of economic, social, and political talk has been around affordability of housing. To explore this topic, it may be helpful to ask some questions. Good policy starts with the right questions. In simplest terms, some people have the resources to have nice homes in nice neighborhoods, others have just tolerable homes for […]
Basic sequence of valuation is basic: identify problem, gather the “comparable” data, adjust, and report. Simple. Basic. The Market for Valuation Series, Part 1 How about AVMs? (Automated Valuation Models). The words are a bit different, but the process is the same: Enter the address, apply the data collect algorithm, apply the predictive algorithms, spit out […]
Could the very definition of market value hold bias? Let’s look. First, we need to figure out what types of bias there might be. There are two major categories: 1) analytical bias; and 2) human bias. And there may be some overlap! Analytical bias generally comes from two places: Error in data selection; Error in […]
Is it time that matters? Or is it different market conditions? At one point, I was told to stop teaching that it’s a ‘time adjustment’. Because it’s actually a ‘market conditions’ adjustment. This bothered me. It seemed like yet another step backward in the march of appraisal practices. Comparing market conditions at two different time-groups […]
Appraiser training tells us to use good judgment – repeatedly. In fact, the word ‘judgment’ is used over 300 times in the current USPAP book. It must be important. It’s also used some 800 times in The Appraisal of Real Estate. It must be important. The basis of appraisal theory in the United States is […]
Data science is new ways of thinking, new tools, computation, and visualization. For valuation, it is simply optimizing the best of appraiser judgment and computer power. Traditional appraisal theory is good. It is a subset of economic theory. What is different is the available data and algorithms to select and predict from that data. Also […]
Time adjustments is a timely topic. Recent ski-jump rises in prices have been ramp-ant in many places. Valuemetrics.info provided a free, two-hour webinar on the topic, and we had almost exactly 1000 appraisers sign up. (Although many did not show – free, you know.) Prior to the webinar, I asked some reviewers about how appraisers […]
Once upon a time, appraisers did not give an opinion! They provided estimates. Why the change? It seemed appraisers were getting sued over their estimates of value, which opened the door to attack on how the analysis was done. An estimate comes from an analysis. The professional response: “We will just deliver an opinion!” Safe! […]
Reviewers ask why a certain sale was not used as a comparable. Why don’t they know I already used the best comps, just like I was taught? Don’t they know I used what was competitive, similar, and “able to be compared” – Just like The Appraisal of Real Estate 15th ed. says: A good comparable […]