Is There an Art in Science?
- Bias. It’s Easier to Blame the Messenger - April 20, 2022
- Hocus Pocus Magic Focus? - March 24, 2022
- Opinion, Estimate, or Prediction? - September 8, 2021
We know there is science in art. Musical scales. Perspective and the golden ratio. The ordered sequence of a good novel. It’s difficult to be a good artist without knowing, or at least intuitively applying the truths found in the logic.
Both science and art reflect our search for the truth. Our primal human nature is to resist the truth, even as it hits us in the groin. Resist the change. Fear. Give up something that has protected you. Something that gives you a place. A belonging. A prestige. An ego. A place where you are respected.
Then someone or something comes along and says there is a better way. I resist. The old way is good. It is proven. My peers do it. My teachers still do it. My tribe still teaches it. It cannot be wrong. How can it be wrong?
Dissonance. What we have is a conflict between our basic needs and higher needs of self-actualization. One side demands safety, food, physical needs, and perhaps our need to belong and feel loved and be esteemed by ourselves and others. The other side pushes us on to what Maslow called self-actualization self-fulfillment—achieving full potential, including things of a creative nature.
One side of us argues that we know the truth, our path, our righteousness. The other side bothers us with irritating new questions, new truths. Worst of all, some of those new truths are of science. Data. Computation. Programs. Algorithms. Software. Dashboards.
Yet we see some ‘science’ as lies. Magical software promising to ‘prove’ adjustments. “We are a technology-based company.” We have ‘proven’ with a nationwide “statistically significant” research which shows that homes with high-pitched roofs sell for less than homes with flattish roofs. In fact, the steeper the roof, the lower the price! Proven. Scientific. See how smart we are.
What’s wrong with this picture? How can this be? Steep roofs cost more, take more lumber, and more nails. This is scientific fact! How can this be?
This can be because of one fact. Science takes art.
The art of science is the question. The art of science is the model. The art of science is recognized in science. It has a name. It’s a form of reasoning.
There are three types of scientific reasoning: deductive, inductive, and abductive.
- Deductive reasoning is the simplest. If ‘A’ is true, then ‘B’ must be true.
- Inductive reasoning is less comfortable: If ‘A’ is true, then ‘B’ is likely to be true. Probably true. Now the new question is: “And how probable is it that it’s true?” In fact, the probability is all that is important. The truth becomes an assumption, a hypothesis, a belief I would like to convince you of. But all I have is a probability.
- Abductive reasoning is even better. It is the essence of the art of science. It’s the expert’s or the amateur’s reasoned assurance that a question is worth asking.
When I was a brand-new appraiser trainee, I was assigned a house appraisal. I was slow. I wanted to be diligent. I spent a day poring through MLS books. Photocopying. Underlining. Guessing key features for “similarity.” It was a house.
Then I went out in the field, clutching my bank of ‘comps.” I looked at the subject. It was a house. But it was not a house. It looked like a house. But the yard was paved over. It had parking stripes. And over the door—a sign. An ominous sign. A sign from the universe: “Fortune Teller Tells All.”
The sign told me was my hypothesis was wrong. It wasn’t a house. It was a retail property. My abductive reasoning worked a hundred times. But not this time.
Abductive reasoning was my ‘best guess’ given what I knew before I started actual research. My hypothesis was false.
But I came closer to the truth. True science is joy in finding an untruth.
And accepting an untruth about my prior comfort zone is called “growing up.” Things change. Technology intrudes. Discomfort ensues. We can only find comfort and safety and belonging and art by asking the right question. Grow up.
What can I do? What can my profession do? Change happened. Have I? Have we?
I think more descriptive in our markets is that with more explanations brings more clarification. So the trend here and in Colorado are the mountain modern homes. These are contemporary style homes that have 1:12 to 5:12 pitches and are sleek contemporary style homes. The chalet was always the popular style home prior to the new trend. Chalets are typically a minimum of 8:12 to 12:12 pitch. The new trends are the style of the home which includes so much more than roof pitch but one could distinguish the pitch as an algorithm but other than that it would be misleading to day the pitch of the roof had a direct affect on value or marketability
New is not always better and often it is far more than a primal urge to resist change. Some recent examples are:
1. Common Core Educational programs vs traditional methods
2. Semi or fully autonomous vehicles sharing roads with human-operated motor vehicles;
3. ZAIO
George, it is not resistance to science or even change that bothers many of us. After all, who more than appraisers have been subjected to change than us in the past three decades? Most of our ‘beef’ is not with science, but the two major drawbacks associated with its current promotion in ‘valuation’.
(1) Phony pseudo science hucksters &/or so-called ‘modernists’ [absolutely not you!] such as ZAIO; Mueller Hybrids; ClearVal hybrids, FIrst American/ACI PACE PRO, ALL AVM programs, etc. that falsely claim “their science” is better than everything else; and
(2) Regulatory adoption of ‘science’ as the ONLY acceptable support rather than a recognition that in the imperfect real estate market that is America, science is merely a tool that more often than not does not account for specific buyers or sellers motivations. A former legitimate ‘tool’ (appraisers 30 to 50 years LIFE experience in real estate markets) has been denigrated to the point the worlds best computers may no longer be used in lieu of falty or flawed data because they are ‘not scientific’ enough …even though traditional science can’t begin to figure out how the neural network based brain-computer works.
George before science (big data), & market accuracy or expedited products can be sought and utilized; ALL the peripheral participants need to adopt and apply the fundamental honesty and integrity that is required of real estate appraisal. Otherwise, science simply becomes the shield of chicanery.
This starts from the top down at TAF; to state regulators (following USPAP would be a good start for them); OR even having licensed appraisers as R.E. USPAP compliance “investigators”; it needs to be uniformly adopted by GSEs, Loan originators, ‘loan officers’, brokerages, title insurance companies (how about THEY stay in their own lane for a change?) & advertising that is allowed to be foisted on consumers that have almost nothing honest within it.
In the present environment (political and on Wall Street) plausible deniability is sought rather than scientific advancement. We’ve known of FNMAs CU flaws for over five years yet they are routinely ignored. So too were the original promises that this flawed system would not be used to review or rate appraisers.
George, to date NOT ONE science-based automated valuation system, can reliably produce credible, accurate results across the full spectrum of circumstances that R.E. Appraisers routinely have to deal with.
The flaw with human appraisers is no more than clients STILL being permitted to exceed the license and experience levels of the appraisers they hire…in the interest of greed and ability to ‘manipulate’ transactions.
It’s time to return to 1989 and start over with FIRREA. This time bypass TAF completely and the ability of State Regulators to bypass state legislatures via AARO. In fact, lets not have states enforcing FEDERAL law at all.
Scientists disagree. That is the nature of progress. Appraisers trying to meet a standard may be the problem.
Values, all values including RE values change, not necessarily up, sometime down, sometimes wallowing.
An advertisement in the paper several years ago revealed a 1964 Chev PU in one of the garages of the dozen or so houses left in the development, Another tract sell out will include a pool in the final phase. 10 years ago appraisers adapted to down adjustments of 3 to 4% per month against recent sales. Twenty years ago New construction buyers might have negotiated an 80% loan instead of the n 95% that they began with in the sales office.
Our historic methods were taught during the depreciation, no sales, only foreclosures, the economy was in a depreciation money was worth LESS every day. Anecdotal comparison, using the few and distant sales were the only method, comparing a farm sale in Oklahoma to a Kansas farm was acceptable (a gross exaggeration) The medical professionals didn’t use statistics until the Teens when Rockefeller invested in a JAMA publication.
Only large government offices had the BIG DATA for stats (The forest Service kept all sales in their card file punch card files thru the 60’s). The Big data began when the MLS’s began consolidating. Big data allowed large brokerages, appraisers, bankers, and investors to plan directions and futures. With Microsoft’s office & MLS any appraiser has big data. The pro with a conscience can document a report with convincing information.
The problem REMAINS; honesty, integrity,
There is Art full science, not to be confused with the Art of science. Remember there are art full appraisers.
Grrrrr right after writing the above-in my in box from Housing Wire-casein point:
https://go.housingwire.com/hw-webinar-new-valuation-trends-disrupting-the-industry
The V.A. would have loaned on it had she been a veteran. As a veteran using her home as a business; she had the right and the ability to sell to another Veteran, un-likely another fortune teller. In those ancient days the planning departments were broad minded. Still the question exists; a residence or commercial, today planning departments are not to forgiving especially to fortune tellers
Like the time this one underwriter insisted I revisit a 10k deck adjustment, claiming the adjustment is significantly different than what peers adjust for a similar item. Yeah, they were probably dealing with a standard deck or patio, something like that. I was dealing with a 20k super whopper of a deck with t&g, fans, multi tiered flooring, vaulted, electric, gas ready in multiple locations, mixed material & iron, and a footprint that went nearly to the fence line within code. Just scooted it to a line item because the peer model comparison system is at times an illogical approach to unique property valuation in the first place.
The digital systems will work and work well, when one hardware company finally monopolizes the entire supply chain and everyone builds the same thing, using the same materials, and same contractor standards, when all municipalities adopt uniform code and regulations. Until that time, objective valuation comparison and adjustments will remain as far more of an art than a science.
If we do send you orders, it’s important that we provide best service standards to our lender clients. That’s why we insist that if our amc sends you requests, you also use our report typing development services. It’s only $25 per report and is completed overnight 7 days a week. What extrapolative program are you using to determine and prove your adjustments, because we also offer these at affordable prices as well. The things they try to sell you in the appraisal industry these days.
That verbiage is someone citing collateral Underwriter drivel. I hope you called them on it. The FNMA “peer model” never was peer opinion for specific issues. Its a faulty database derived from a time when line item % adjustments were still the rule. SO now they have a database that thinks patios are only worth $500 to $1,500.
And a body of appraisers whom unknowingly dealt with systemic training shortcomings who think the same thing.
Apparently with digital review systems and an army of non licensed reviewers out there providing assurance they are providing quality assurance, the game has changed. Appraisers no longer need to do it right per classic valuation theory. If you have enough comps in there, and at least one of them brackets the final opinion, you’re on the money. If all your field entries are mapped in a uniform manner, data in alignment, pass the review gate.