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5 Year Outlook on the Appraisal Profession? Your Opinions Please

Ken Masla

Thread Starter
Junior Member
Joined
Jul 17, 2006
Professional Status
General Public
State
California
Seems like "Big Data" is going to dictate how the appraisal profession and mortgage industry goes forward.

How do you feel about how fast technology is creeping up?

With increased utilization of "hybrid" appraisals / evaluations and the exponential advancement of AI and machine learning, should appraisers be worried about their profession?

Gathering data is also becoming exponentially widespread and intrusive.

If you are not in the position to provide expert witness in court, should you be worried about the long term also?

Anyone think professional advocates seemed to have been short sighted and arrogant, therefore not properly preparing for all this technology?
 

Terrel L. Shields

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Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
While your questions are more declarative than inquisitive, I will bite with my opinion.

How do you feel about how fast technology is creeping up?
Machine learning is not true artificial intelligence. The heuristic nature of true valuation cannot be duplicated and reliance upon that notion is to not understand how the human can be fooled by randomness.
With increased utilization of "hybrid" appraisals / evaluations and the exponential advancement of AI and machine learning, should appraisers be worried about their profession?
The profession has long ceased to be, and is merely an occupation in its present form, more so with the "hybrid". We should be handed an occupation license not a professional one. Dictating the format and nature of the "profession" is done by the banking industry and its minions, the appraiser has no real inputs.
If you are not in the position to provide expert witness in court, should you be worried about the long term also?
Not all non-bank work requires "expert testimony" and I, for one, do mostly estate work and work with the smaller community banks. Condemnation may require court work, but most of that work is likewise outside a court room.
Anyone think professional advocates seemed to have been short sighted and arrogant, therefore not properly preparing for all this technology?
Who is advocating for us? It isn't the boards nor the professional organizations, nor TAF nor ASB nor the bankers, and again, the presence of technology does not make the technology correct. It cheapens the price perhaps, often to our disadvantage but I see nothing in the technology that makes the machine learned valuation better than the judgment of the appraiser. That applies today and it applied in 1992 and likely in 1952. For the consumer, the computer has no liability, no accountability and no soul. When we turn the task of valuation over to the computer, heaven help us when it comes to assessment for property taxes. How do you contest a bad valuation when it is all computers? Same for the poor sap who has a new road ripped thru the middle of his back yard...judgment. Machine learning will never replace the judgment (heuristic qualities) of the human mind. When, if they do then the machine will create, repair, build, and replicate itself and engage in warfare with the human until it annihilates them....HAL on steroids.
 

OSU Beavers

Elite Member
Joined
Jan 10, 2007
Professional Status
Licensed Appraiser
State
Oregon
Half of my work is verifying bad data and getting the correct information on the report. Corelogic may read and steal my data on a comp, but then with the next listing a Realtor will feed more misinformation into the machine. Between Zillow and incompetent or puffing Realtors there is enough garbage data out there to keep me appraising for the next 20 years.

Oh, and in five years, the after Trump recession, you think any banks are going to lend off of an AVM or hybrid appraisal?
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Some of the changes we have experienced in our profession are simply a result of technology advancements; i.e hand written Post Card Reports, to written letter size reports that have more details, then to more organized and detailed multi-page reports. Letter to Legal Size paper, etc In there the hardware got better, manual typewriter, electric typewriter, then all of a sudden IBM came out with the DOS 386 puter, and tractor feed printers. Very Expensive advancements , then due to competition cheaper and cheaper This progression was guided by technological advances. Efficiency was the goal. Essentially labor saving advancements. B&W Photos, Color photos, 35 mm cameras, yada yada. All this progress was not made because of Appraisers/Appraisals but actually geared to mainly All business and spin off to personal individual lives.

When Algore invented the internet all bets were off....Now we stopped going to the court house/tax office. Because it was becoming available on line. Not everywhere but major metro areas were first and as it got cheaper then out to smaller municipalities.

I could go on and on...blah blah blah.... all I know is that progress is inevitable ...adapt and exploit the changes(keep moving forward) and you will survive ... or you will perish a slow painful death....avant garde is the word of the day and every day from now as an appraiser. Some of you that are much younger need to do some real soul searching... My only advice is directed at the One trick Ponies; at this point you should develop an escape plan....Be prepared to execute that plan at any moment.

Tell me where i am wrong! i am always open to others thoughts...cause i dang sure don't know everything...and If I was really Bright I would not be typing this today.
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
Some of the changes we have experienced in our profession are simply a result of technology advancements; i.e hand written Post Card Reports, to written letter size reports that have more details, then to more organized and detailed multi-page reports. Letter to Legal Size paper, etc In there the hardware got better, manual typewriter, electric typewriter, then all of a sudden IBM came out with the DOS 386 puter, and tractor feed printers. Very Expensive advancements , then due to competition cheaper and cheaper This progression was guided by technological advances. Efficiency was the goal. Essentially labor saving advancements. B&W Photos, Color photos, 35 mm cameras, yada yada. All this progress was not made because of Appraisers/Appraisals but actually geared to mainly All business and spin off to personal individual lives.

When Algore invented the internet all bets were off....Now we stopped going to the court house/tax office. Because it was becoming available on line. Not everywhere but major metro areas were first and as it got cheaper then out to smaller municipalities.

I could go on and on...blah blah blah.... all I know is that progress is inevitable ...adapt and exploit the changes(keep moving forward) and you will survive ... or you will perish a slow painful death....avant garde is the word of the day and every day from now as an appraiser. Some of you that are much younger need to do some real soul searching... My only advice is directed at the One trick Ponies; at this point you should develop an escape plan....Be prepared to execute that plan at any moment.

Tell me where i am wrong! i am always open to others thoughts...cause i dang sure don't know everything...and If I was really Bright I would not be typing this today.
I find that often you and I have different perspectives on a variety of subjects....

Regarding this post....
I'm in 100% agreement....

Of all the industries around today....
Appraising is one that AI/automation can easily replace the human....
 

Bert Craytor

Senior Member
Gold Supporting Member
Joined
Jun 27, 2017
Professional Status
Certified General Appraiser
State
California
The gross misunderstandings of statistics by leading appraisers in the field will begin to subside to a new and better understanding of the mathematics of non-parametric statistics and how it can be applied to valuation problems. E.g.

1. Understanding that a high R2 is required for a good model, but a high R2 does not guarantee a good model.
2. Identifying overfitting and how to avoid it.
3. Layered analysis of residuals.
4. More MARS and Kriging.
5. Better understanding of what accuracy is and is not.
6. Better accuracy.
7. More detailed and accurate inspections.
8. More tools for analysis.
9. New kinds of Market Value, e.g. "Stabilized Market Values", http://collateralrisknetwork.com/wp-content/uploads/2015/04/wolfgang_and_lux_presentation.pdf for insight.
9a. There are various "Stabilized Market Values" used in commercial appraisals, but not recognized ... Appraisers fudge the numbers to give clients what they want. Such versions of market value should be recognized for what they are. E.g. you could define a Stabilized Market Value as one that is the average MV over the past 2 years (how you get that another story.)
.... And so on.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
More detailed and accurate inspections.
This only leads to more detailed and accurate descriptions of the comparable needed, otherwise you degenerate into a cost approach devoid of any parameters to calculate depreciation outside a straight line depreciation. Again I contend "artificial intelligence" is a misnomer. It is simply machine learning. The machine cannot "think"... and if it could, it would replicate itself and declare war on the only threat to its existence - humans.
 

Tawfik Ahdab

Senior Member
Joined
Feb 19, 2003
Professional Status
Certified Residential Appraiser
State
Oregon
Hybrid appraisals will only be used if we allow them to. And if we don’t approve of them for the obvious failings that they will quickly manifest, then we don’t have to have any thing to do with them. In that case the hybrid appraisal program will crash and burn. The form monkeys can fill those out all day long. The problematic results will only more quickly be on display.

Last time I checked my signature still mattered. If I don’t sign there is no appraisal. I’ll keep that in mind before I sell my soul for cheap.
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
"Again I contend "artificial intelligence" is a misnomer. It is simply machine learning. The machine cannot "think"... and if it could, it would replicate itself and declare war on the only threat to its existence - humans."







"Artificial intelligence breakthrough: Self-taught AI solved Rubik's Cube in just 1 second"


 
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