The market flows and ebbs on many basis’s: Financial wherein the lender need to secure monies in R.E., for guaranteed returns, or in higher returns based construction monies, or on agriculture based on short terms. You get it!
These flows are measurable from the MLS’s closing dates v offering dates. When these two figures are sorted, they represent stuff, which can be interpreted and verified as meaningful or not. Did it close in 45 days or in ten months?
Can’t the appraiser recognize that using two-year-old sales comp’s have meaning and be part of the value conclusion?
Agents, buyers, sellers and Lenders all have differing opinions.

Excellent, always like watching those guys. Sadly though, even though at the upper levels the avm companies realize the ibuyer approach may have been a mistake, so many of the destructive tools to arise from those approaches remain. The property managers, amc’s, and many individual lenders are still leveraging the tools they were sold, continuing to push remote inspections, hybrid service reports, avm based waivers, etc, etc. These big corps only protect themselves, leaving all the mess and risk for regular people to clean up. Funny how the message about caution and the big tech programs not working well are lost in translation, as the TAF and their partner amc groups continue to push for avm’s, continue to promote hybrid reports, continue to restrict the appraisers ability to provide legitimate full service appraisal services. Restraint of trade is the name of the game to push these harmful new programs out to consumers right now. Big bad evil racist appraisers are at the heart of it, we are the groups stopping this great new avm tech from being more readily accessible to consumers. Funny again how the slander to push these programs through still sticks, even though the programs themselves have already fallen flat in record time. Tried another manager solicitation the other day, trying to push pace pro remote hybrid inspection deals; ‘multiple people working on value reports at the same time’. The concept is asinine.

Just the other day we entered several addresses which were 200k short on the avm indicator compared to others immediately next to them. Interestingly these appeared to be long term owner properties. Something about not having a recent sale or refi indicator can cause misleading avm results where that very old sale somehow anchors value estimates much below the current market. Sounds suspiciously like some of the abuses of lenders from the past, having incentives to drive long term owners out of properties for financial benefit. Surely the we buy houses for cash people are not complaining about this known avm systems flaw.

The concept of validating avm’s in general is rooted in this concept of everyone should be able to know their homes worth nearly instantly, so they can likewise access new credit and loans so swiftly. Often referred to in lending as the velocity of lending, something annoying appraisers often slow down. They can issue credit checks, review employment, form approvals, nearly instantaneously, get a life changing substantial sized loan to someone in a mere day. So what gives with the value consideration delay when people try to leverage their real properties and it takes an appraiser weeks to issue a signed insured report?
People should be careful what they wish for, these automation advents would turn the entire American housing market into a commercial speculation haven, ran like wall street. In fact it already has.

Well said jaydee!

Just where did all the AVM’S GLEAN THEIR INFORMATION FROM IN THE FIRST PLACE? DATA MINING. You reviewed 100’s of appraisals? All in line with USPAP Standard Rule-#3? Expert in all markets? Because your an AMC reviewer? I wonder about the competency rule… that you didn’t adhered to. The 1004MC “forced appraisers to do something”? When the market is going up over a period of YEARS it’s rather easy to support increased values. But if as you say, “reliable AVM’S will be able to measure the decline in many markets, then they lost billions by not verifying “faulty appraisals that you data mined to begin with”. Then there were all the predatory lenders who made billions before the appraisers could no longer support a 576 sqft one story for $420,000. They panicked about values. We won’t talk about the nonexistent arm twisting that lender ABC, XYZ and 123 brought to bare upon appraisers. If you don’t get me this value, I’ll find someone who will!!!! Nah that didn’t happen either. 40 year mortgages, stated income, double zero down on and on that went. GSE oversight? NOPE. Easy to blame appraisers. Just remember, when you point a finger at someone, there are three more pointing back at you from your own hand.

In addition to that Rick, over a years time, you may have increasing values and decreasing values reported in the report at the same time. Meaning long term (year over year) prices may have increased, but over the short term (- 90 days), values may have declined and negative time adjustments are warranted. With an explanation, the neighborhood section could be correctly indicated as increasing, while a different explanation should be provided for negative time adjustments. On a side note, I completed a report last week (a one bedroom house, 1,500 sf lot, 110 years old, etc.), where I had to use a comp that was nearly two years old. I had increasing months, stable months, declining months and in the end a positive time adjustment was warranted. Funny enough, all of my other comps had negative time adjustments.

Seek the truth.

AVMs will be able to reliably measure the downturn, because, you know, nothing is as reliable as extending a linear function into the unknowable future.

What an odd response to the article! Were you involved in Zillow Offers by chance? Zillow lost about $350M with the most sophisticated AVMs that money could buy.

There was a time when lenders disqualified many loan programs if the appraiser indicated that property values were declining. Blame the appraisers if it makes you feel better! I think you protest a little too much.

“History tells us that there will be many appraisals marked “in- balance” and “prices stable” during the current (or soon to come) market downturn, whereas reliable AVMs will be able identify & measure the decline, in many markets.”

I think you believe that when appraisals are marked “in balance” and “prices stable” it is referring to at least a regional market and at most a national market. The residential appraiser is analyzing a neighborhood for the subject property and it may or may not be in balance and prices may or may not be stable but this is not for what you might read in the paper in reference to the national economy.

Says the guy who “co-developed an Automated Valuation Model or AVM for Veros Software.” Biased much?

Are you saying that because you reviewed hundreds of bad appraisals & review appraisals, that it was the appraisers fault for the market collapse in 2007-2008? Based on hundreds of bad appraisals, all appraisers were at fault for billions lost?

With friends like you, who needs enemies!

I reviewed hundreds of appraisals & review appraisals and re-appraisals & reviews of reviews from that era.

Many loans became first-payment defaults. Appraisals were 20% to 100% or more excessive.

The AMC reviews of the original excessive appraisals, usually involving an out of State reviewer, found nothing wrong with those egregious appraisals.

From this fiasco came Dodd-Frank & dominance of AMCs. And 1004mc to force appraisers to statistically measure & report market trends (it’s a terrible format, but at least got appraisers to do something)

Appraisers don’t forecast and don’t save lenders from market downturns.

History tells us that there will be many appraisals marked “in- balance” and “prices stable” during the current (or soon to come) market downturn, whereas reliable AVMs will be able identify & measure the decline, in many markets.