What are Appraisers? Red Box or Block Buster Video?
How do we move to be more of a Red Box?
I stopped at a Sheetz to get gas. As I was standing there I noticed a Red Box Machine which had a steady flow of traffic. Next door was an old closed Block Buster Video. Hmm… When my kids were little it was a big treat to go to that Block Buster and rent a movie. We had to wait in line 5 to 10 minutes  and now it’s closed. But the Red Box machine is steadily pumping out DVDs. So I got to thinking. What are appraisers? Are we Red Box or are we Block Buster Video? If we are the latter, our days are numbered. How do we move to be more of a Red Box? More technology, faster turn time, less personal intervention?
The average age of the appraiser is 58 and there are about 33% fewer appraisers. And the number is falling. We all know that. How do we right the ship. We may not be doing appraisals for loans much longer. But there are plenty of other uses of appraisals. Do end users know the difference between an appraisal and a BPO?
Well to right this situation, we need everyone’s support. VCCAI held its election and the turnout was overwhelming. We had nominations 2 to 3 deep for just about every position. Thank you to all the members for that. VCCAI will continue to have strong leadership. To combat the aforementioned change, the Appraisal Institute is putting on classes that will help you move away from loan work.
VACAP has not closed its nominations yet. We have a couple of new people that have expressed a strong interest in leadership. We thank you. If you are saying “Hey I want to help and be part of a greater good” the deadline is May 15, 2015. We need to find a replacement for Don Clark who after 30+ years is slowing down.
FYI, in June HUD has a new handbook that takes affect. I have embedded a copy below. And my useless fact: the suburb population is growing at 1.2% which is up from 1.1.%. Rural areas grew at 0.87% up from 0.56%. Metro Cities which were growing at 0.9% are now growing at 0.7%. Looks like the growth is moving back to the country.
Go Fight Win
By Alex Uminski, VaCAP Treasurer
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> Are we Red Box or are we Block Buster Video?
Appraisers are Block Buster. Instead of Red Box, appraisers need to become Netflix.
Interesting, but I’m going to reach out with the alternate. We’re the production crew, and nothing moves ‘through the box’, until we produce it. A list movies don’t appear on the Red Box until a month or two after their primary release date anyways. Always disappointing, except for about once a month when they actually secure a quality movie right at new release. I’m more of a pre order guy and would rather own the physical media. Got to think long term, and automating could mean no job in the future. I’m not voluntarily relinquishing my position to a robot, if I can help it. I miss blockbuster, because I could watch interesting specialty movies and have choice. It was worth the extra cost, and you could sometimes buy the movie later. Take home that movie in it’s original box, with artistic cover, and hold it in your hands with pride, knowing you’d never have to pay to watch that great movie again. Watch it today, watch it next week, watch it next year. Never costs anything more than your initial purchase price. I buy used dvd’s by the hundreds at the goodwill for a dollar each sometimes. I’m not going to run out of fresh movies to watch any time soon. These analogies are confusing me, because I’m all about ownership and not subscribing to monthly cost services. Ha!
Appraisers are both Redbox & Block Buster Video.
Once upon a time we stood in line for hours to see Jaws and Star Wars. Cinema was IT…the only IT in fact. IT later gave way to video tape rentals (Block Buster) which gave way to DVD rentals, which gave way to Netflix & Redbox. Netflix and Redbox are already beginning to lose market share as they take their turn in line of obscurity.
The appraisal profession continues to evolve in much the same way. Film based photos and real signatures gave way to digital photos and digital signatures. Artificial intelligence has the capacity to turn the appraisal profession on it’s ear far faster than any of you realize. Within a matter of years home inspections (data input) will be the only necessary from a human being aside from software engineers. I see this taking place in less than 10 years as the appraiser shortage reaches critical mass.
Necessary from whose perspective? The checks and balances systems are vital, and cannot be substituted by pre programmed computers and algorithms. If there is no more appraiser mandate in lending, the natural consequence of that in an honest business setting is that lenders would qualify the borrowers payment ability for the amount lended, instead of focusing on the ever changing collateralized real property value. In which case, the open market for home buyer appraisal services would explode and get really really busy. You’d have to be absolutely out of your mind to buy a home without having a checks and balances system in place to make sure you were not getting ripped off, over paying, or under selling. If automation gets that far legitimately, it will seek to replace both realty and appraisal, and the result will be an explosion in demand for independent auditors, not associated with central lenders. Betcha a hamburger that credit unions won’t go that route, because unlike many centralized bankers, credit unions still actually shoulder the risk and loan their own money.
You need not look any further than the stock market to see where the appraisal profession is heading. The stock market requires a checks and balance system far more than the lending industry. How much of the daily trading volume do super computers do? The number was around 90% five years ago. Initial stock valuation is no different. If you want to know where real estate valuation is heading tomorrow watch the stock market today.
And of course, scandal was the result. Manipulation of the trades through the digisphere. There is always a person behind any program. Reliance on computers is a mistake. Stop the Robots.
Thanks Alex! I always like your perspective on things. And keep up the emails, I do actually read them!