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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
Exactly. Artificial Intelligence is a misnomer and is merely machine learning. It has no soul and people make financial decisions that are beyond mere economic calculations.


Elon Musk warned the "experts" are dumber than they think. Bill Gates thought AI was as dangerous as nuclear weapons. He also said, "I do believe that when computers take over certain tasks, that will be tough for us. It would be a looong time before you’re matching the type of judgement that humans exercise in many different areas "
I'm starting to actually think that you think when people say AI, it means a literal robot walking around doing tasks and things like Terminator.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I'm starting to actually think that you think when people say AI, it means a literal robot walking around doing tasks and things like Terminator.
And I am convinced you mistake a machine learning using rote calculation for an artificial intelligence. As Musk and Gates clearly believe, AI is no panacea and is "decades away". Intellect has the emotional element that can, so far, only be replicated in the human mind. The state of the art is machine learning...and comparing the results of valuation from of the most sophisticated algorithms devised shows a random error rate far greater than humans would do. In another thread I listed the results of 3 AVMs. Recall Zillow spent a bunch of money for a new algorithm and comparing the results of Zillow with another company they own Trulia, was some 40% difference. A dartboard has more " artificial intelligence than that. The speed of a calculation should not be mistaken for intelligence.
 

Mark K

Senior Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
I'm starting to actually think that you think when people say AI, it means a literal robot walking around doing tasks and things like Terminator.
Maybe not today....

Actually I have a cousin that's a professor at UC Berkley working on various AI projects so I am pretty familiar. Some of these research projects would make some people pretty nervous.
 

Doug Wegener

Senior Member
Joined
Apr 14, 2005
Professional Status
Certified Residential Appraiser
State
Oregon
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?
5 years out and,hopefully, I won't be doing it then. The big 70 coming soon.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
5 years out and,hopefully, I won't be doing it then. The big 70 coming soon.
Heck I may return to room temperatures before then... Seriously it looks like the true "hybrid" appraisal, which is no technological advance in itself, is not getting a lot of traction. And the law of diminishing returns suggests banks need to eliminate appraisers to increase their "efficiency" to a 2 hour loan turn around on line. No problem if all bonus driven employees, the CEO, & bank board of said bank are sent to prison if so much as $1 is paid by the taxpayer to bail them out.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Ken,
What will Big Data "exponentially widespread and intrusive" handle the first indication of a declining market? If we have any indication, its from programmed trading of the stock market, where at the first hint of a 'sell off' it will crash the market, because "Big Data" has no sense of history, no sense of the market, its just numbers to the AVM. Do you think a Bifurcated report is a 'better' report because its supposedly a more disjointed assembly of information?
 

Charles West

Sophomore Member
Joined
Sep 14, 2004
Professional Status
Certified Residential Appraiser
State
California
Here is the thing. Ten years ago I finally figured out the conundrum. Back in the day I used to get $350.00 a pop for non-complex assignments and didn't have any stips, complaints or problems. My reports were highly documented, literate and well-supported like a flowing river running through the neighborhood description, trends, cost approach (always whether I was asked or not, couldn't complete a report if I didn't because I relied on it). Then I saw the scope creep but no change in fees. Then in 2008 or whenever it was the **** hit the fan. Couldn't get work, reos were the rage, unbelievable volume. So what did I do. I contacted one of the broker big shots in the area that was getting more foreclosures to put on market than he new what to do with. I told him that I could complete his bpos like nobody's business and I was heads over heels the favorite with the asset managers because I knew what I was doing compared with typical real estate agents. Two weeks into it the broker was my slave. We made a deal that I would get 30% of the listing fee, yes 30%. It was heaven for me pushing the bpos out, easy peasey. I tripled my income I was used to in six months and that lasted for two years. Then it stopped. I went back to the mortgage market and some private attorney stuff and my income plunged again. To me this stuff you guys are talking about is old news. Take Bert for example, who I admire greatly for his technological prowess. I used statistics to a great degree but not to the extent he's talking about. The databases that are being created are humongous, hell they go back 30 years or better. No human is going to be able to compete with this because we can't process 1000 transactions in five minutes within a 5% error rate. It would take me a month to do that, provided I had the database. I honestly don't see the future in the business because once the proper software programs are written the lenders will start using them to the exclusion of appraisers, and yes the reports will be supportable and will be definitive. We will become inspectors only to counter fraud (you know kitchen and bathrooms stripped, blah, blah). You'll get $50 to do the inspection. The attorney stuff will last a little longer as will some of the commercial stuff but the need for volume and speed due to the velocity of money is going to bury this profession and everybody in it. I hate to see you guys going over the same stuff over and over. Time to be proactive, tell the AMCs to go sit on it and start looking at the opportunities out there, they are all around everywhere but you have to get out of the trench to see where they are!
 
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