If regression is just a math formula, how can anyone claim “Ours is better than theirs”? Who do we believe? The reality is that the standard least-squares formula is just the inner algorithm. There is the input, the magical regression algorithm, and the output. Four useful appraiser things to consider: The analyst’s decision that regression […]
Can I Reproduce? Please? Why won’t they teach me how to reproduce? We hear of a “reproducibility crisis.” What is it? Who cares? How does it affect me? And finally – Do we reproduce properly in the appraisal process? Depending on the author, the scientific method can be broken down into four parts, or five […]
Recent presentations and articles on “Big Data and Appraisal” universally say that big changes in technology and analytics are affecting appraisal. What I don’t hear is: What can I do about it? Will I be able to work in five years? Will our appraisal organizations be around? If there is a place for me, what […]
What are the Three Erroneous Zones? Problem solving works best if you can give the error a name. Do appraisers operate in the three erroneous zones? Errors are best handled if you can clearly identify the type of mistake. In the Fall of 2013, The Appraisal Journal, published my paper, Common Statistical Errors and Mistakes: Valuation […]
In an earlier post we noted that the ideal comparable data set is the complete CMS, the Competitive Market Segment(c) , not just three comps. Some readers disagreed, believing that three comps is enough. A primary reason for the use of all sales which competed directly with the subject property is that it improves the […]
Our education tells us a comp is similar and competitive. So how do we measure “comparability”? If our job entails studying market data to get an answer … might it be important to know exactly how to describe a comp? In researching the literature, including journal articles, I find little help. Only two or three […]
Why do we put “stats”, “graphs”, and “data science” together? (Part I of VI parts.) In coming blogs, we’ll look at each of these four words separately. Today (part I) we look at the whole for its parts. We use this principle of the scientific method: take a problem apart into smaller parts, study the […]
Stats can be troublesome. Knowing the why, the what, and the how of statistics can help rescue the appraisal profession. Continued misuse and misunderstanding will help bury it. Let’s look at these three questions. We look at misused words, statistics, and the opportunity. First: “The main problem with statistics is words.” Statistics is the study […]
Well, of course – appraisal is not based on our subjective beliefs. It is based on support! Support your opinions and conclusions! Support your results “by relevant evidence and logic.” Form your opinion, then support it . . . These words have always bothered me. A scientist does not form an opinion, then figure out […]
What kind of appraiser are you? Different appraisers have different attitudes! Some have a lot of experience, others a lot of education. Others emphasize the ‘art’, while others consider themselves ‘quants’. Let’s put aside the ‘art’ versus ‘science’ discussion, where the artists say: “No computer will ever replace the appraiser”, or “No amount of education […]
We have been taught that appraisal solved one problem: the opinion of value. We were taught an “appraisal process” (now a “Valuation Process”). The process is called a procedure. It goes like this:[1] Identify the problem Decide on your scope of work Collect the data and describe the property Analyze the data (include market analysis) […]
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 […]
Graphs and plots are good! I have used graphs in my appraisal reports for many years. There are a number of advantages: One visual is worth many words. Properly done, they demonstrate competence. They are easy to create in open-source and for-money software. Analysis speed is improved. They focus on what is important to clients. […]
In this Part II, (see Part I here) we will reduce the comparison to the component comparable parts. Appraisal: Pick comps. Make adjustments. Opine a number. Data Science: Identify data. Clean the data. Run predictive algorithms. Similar huh? Well – yes and no. Let’s look around. We begin with the beginning: What questions do we […]
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 […]