Fannie Mae’s Director of Collateral Policy, Lyle Radke, spoke at the Housing Wire conference this week.  The audience was mostly non-appraisers.  They laughed when he said:

“Appraisers see their job as an art form. It’s hard for them to rigorously explain exactly what they’re doing.”

For the record, what we do at Valuemetrics.info is exactly that:  provide appraisers with ways to “rigorously explain what they are doing.”

Along those lines, we, and the Community of Asset Analysts — emphasize the critical nature of valuation:  that market conditions are the real subject of valuation and risk analysis.

In a CoreLogic interview last month, Freddie Mac’s chief appraiser Scott Reuter stated:

“Appraisers need to spend time on developing a market conditions analysis in the appraisal. It’s truly the backbone of the appraisal.”

Again, at George Dell’s Valuemetrics, we are dedicated to the belief that appraisers are best suited to provide for the safety of consumers and taxpayers in real estate transactions.  In our education, we focus on the theory and practice of rigorous market conditions measurement.

The Problem:  Appraiser education has fallen dramatically behind what is possible in analytic technology.  Appraisers have been good at adopting product technology.  Things they buy:  computers, cameras, internet, and data base access, and now even on-line education.

And appraisers have been divested of the technology they can sell:  more and better products and services, using process technology.  The appraiser-analyst is paid for market knowledge, training, experience, and the ability to transmit useful information for collateral lenders, investors, and equity enforcers (tax and justice). Fannie

Today’s process technology comprises instant data, computation, and the interaction of the expert human brain with the power of the computer.

Your expert brain power connects with computer power through your eyes.  Mostly graphs.

The math is easy.  The “statistics” is simple.  It is about the mean, median, range, percentiles, and deviation.  That’s it.

The profession of appraisal has been good to me.  I also believe that joy comes from sharing gifts that I have been given by the universe. Fannie

I was given the gift of circumstance.  Of unusual education, a strange occupation (appraisal), and the luck of good trainers and good education from my universities, and the early Society of Real Estate Appraisers and later the Appraisal Institute.

The circumstance was one of a combination of academic and practical adventures.  The result was some understanding and competence in what was later to become “Data Science.”

I learned that statistics was mostly theoretical.  That most statistics was taught everywhere except in math and statistics departments in universities around the world.

I learned that data science recognized and demanded the participation of a field-related expert.  The expert we need is the appraiser – the asset analyst.  The future belongs to us if we prepare.