Don’t R-gue With Me?

The appraisal profession is hamstrung.  Who did this to us? Looking for cause?

When things feel and act difficult, it is only human to look at cause.  It is them who create problems.  If only they would see things our way.

If we took a poll, who is it that is causing us the biggest problems?  Is it the regulators?  The reviewers?  The AVMs?  AMCs?  The licensers?  Fannie Mae?  Court rulings?  Our Standards?  The Appraisal Foundation?  Professional organizations?  Out-of-data education?  Our software?  Or the ‘skippies’ – marginally ethical competitors?  Whew!

Is it all of the above?  Some of the above?  Or is everything just hunky-dory until I retire?

Unless we are an involved part of any of the above, we have little direct influence on changing things.

Only one question remains.  Only one question is relevant.  That question is:  “What can we do?”   “What can I do?”

I believe that psychologists would say that a focus on “What can I do?” helps mental health.
What is the problem, and what can I do to make things better?  What can I do to be happier, feel better about my work, and my place in the world?

Of the above list, it’s our main tool that we can change.  It is our software.  Our software is all about tables.  Little boxes of comps and features.  Boxes of variables and cases.  The cases are the comps, and the variables are the features:  the sq.ft., the site, the parking, the rate, the ratio, and even the ‘appeal.’

Our software has itself been influenced from the outside.  Them again.  The software has to follow the old pattern of cases and features.  Just as we have to follow the boxes.  On the residential side, our forms still dictate that variables are horizontal, and comps are vertical, different from all known statistical and business databases.  We continue the tradition established of three comps on a page – because it fits on an 8½ x 14 sheet of paper, vertically.  On the non-residential side, appraisers did turn to the spreadsheet “landscape” view.  It became easy to put 7 or 8 comps across, and list the ‘adjustment’ rows in the right sequence (rights, financing, location, time, rates/ratios, and features).

And the data still comes in letter-size pages, or in spreadsheet form.  The spreadsheet copies the database analytic format of cases on the rows, and variables on the columns.  Then we immediately pivot the data to the old way —  columns = comps, rows = variables.  Immediately.  Habit.  Convention.  “We’ve always done it that way”

Changes, Changes

The changes we see today are technologies:  instant, complete data and analytics software.  Appraisers take advantage of neither.  We still use 3 or 6 comps, and little boxes.  We use the accountant’s tool, the spreadsheet – not the analyst’s tool, R.

R is the most widely used analyst’s package in the world.  Yet few appraisers have heard of it.  Today’s software enables clearer thinking, better analysis, and convincing reporting – freed of the little boxes.  This is why we introduce R in our classes “Stats, Graphs, and Data Science1.”  Freed of the mental restriction of the bookkeeper’s tool, the software matches how appraisers really think.  And help enhance that analyst thinking.  And help explain the opinion to the client.  A good thing.

In today’s San Diego Union-Tribune paper, there was an article about jobs and technology.  A  short paragraph in that article, by Phil Blair in “Career Advice.”

As our tools improve, technology magnifies our leverage and increases the importance of our expertise, judgment, and creativity. . . .Could you find yourself being replaced by automation?  What skill sets are you developing today that may be automated within your work life?  Are you willing to adapt to the new qualifications?

Are you willing?