I have been accused of using new big words, when old little ones would do! Yes. Guilty. Why? What is the context? What are the goals? What is the path to the goals? The context is that most readers of these blogs are appraisers or collateral/risk people. The context is also that all related financial […]
How can spreadsheet software hinder the profession? A Wall Street Journal article, and a presentation at the Appraisal Institute National Conference have similar stories. One addresses accountants, the other is about appraisers. Editors Note: The Stats, Graphs, and Data Science classes taught in Detroit the week of September 23-27, 2019 included the first ever meeting of […]
Some ten years ago, we saw the start of the economic meltdown. Were appraisers to blame? Some tried to pin the blame that way. But was there a big lie underneath? The required (federally insured) definition of value has seven distinct elements. Were appraisers doing what they were told? Buyer and seller each acting prudently […]
There is evidence that human judgment WINS – the appraiser opinion beats the AVM and other valuations based on technology. In fact, I have often heard that the qualified appraisal, based on the human logical analysis – is the “gold standard” for the industry. This appears to be true of client groups, and appears to […]
Damn, isn’t just plain thinking enough? Now he sez I gotta start thinking about thinking too?! Ted Whitmer was teaching his AI “Third Party Provider” class in Houston last week, the day before the Stats, Graphs, and Data Science1 class, for the AI Chapter’s annual 28 hour recertification week. I was privileged to drop in […]
I’m reading a book named “Start with Why,” by Simon Sinek. Start with Why makes the point that people who rally behind something are more motivated by a common cause, than by a common solution. Our cause is motivated by hearing, seeing, and reading about fellow appraisers’ concerns. There is anger and frustration and disappointment. […]
Because the Appraisal profession is in trouble. I have heard these words from many people. From inside the AI, and from those outside. From members of the ASA, and other national organizations and from the many growing local organizations (mostly residentially oriented). Yet there is a need, a real need — for appraiser competence — […]
Think up an adjustment amount, and then support that amount. Interesting, the ‘support’ language we use for our work. Form an opinion, and then support it. Isn’t that backwards? Shouldn’t it be “calculate an estimate”, and then form an opinion? Develop an opinion. A dictionary defines develop: “elaborate or expand in detail,” as in “to […]
Actually, they are not new. The economics are not new. The designated three alternatives — cost, income and comparison — approaches remain valid. What is new are today’s technologies. The ones important to us are: 1) the extensive and complete data bases of market data, 2) computation power and algorithms, 3) interactive brain-machine interface. The new […]
Daddy, how do You pick comps? We asked about comp selection in today’s “big data” world. We considered why we used three comps on a form, or put six comps on an accountant’s spreadsheet. But what are the different ways appraisers use to pick comps? We can use “good judgment” to pick comps. Or we […]
We asked about comp selection in a “big data” world. Why do we still use three comps on a form, or six comps on a spreadsheet? What is the right data? It has been claimed that three comparables was used because they fit on an 8 ½” by 11” sheet of paper. For commercial work, […]
Comparable selection is fundamental. In the traditional “valuation process,” first the “relevant characteristics of the property” are identified. Then in the “data collection” step, “Comparable Property Data” is collected. The subject is depicted by relevant characteristics (predictor variables), and comparables are chosen to fit that depiction. In the traditional procedure, these are called “elements of […]
Regression is just a math formula. Regression is not magic. The answer is only as good as the data used. Regression is a tool. It is helpful to understand the difference between a tool and a model. To build a house, you need a hammer, the tool. You also need a nailing schedule, which tells you […]
Evidence Based Valuation Practice: Toward Real Price Indexing As a first, fully-explained example of the EBV approach, I want to look at one of the earliest but more important applications of our new way of thinking – price indexing. We can simplify things by looking at what we were taught, in order to discard some […]
Why this is Called the ‘Analogue Blog’ and Why You Should Join in. Well, for one thing it rhymes and helps create curiosity. And the words mean something. “Blog” is part of the purpose of this web presence and community. “Analogue” describes well the core spirit of the community we are connecting. A blog is […]