The extent to which an AVM’s valuations approximate actual market values. Analysts usually examine a model’s overall accuracy through two different types of metrics – measures of AVM bias and measures of AVM precision.
AVMetrics has a new method of testing AVMs. The goal is to avoid the process of "anchoring," which is when AVMs adjust their valuations based on listing prices. Our new method is a dramatic innovation that will level the playing field for all the AVMs.
Brookings Oct 2023 AVM Whitepaper makes some excellent points. We provide our perspective, support most of their recommendations, and point out how they underappreciated our contribution to the AVM industry.
We have mixed feelings about Mark Sennott's whitepaper. He echoes our concerns about why AVM testing is important, but he reveals that AVM test results are NOT determining which AVMs are used.
Regulators are signaling that they are going to be looking at AVM testing. They are focused on valuation discrimination. This represents a change in the focus on AVMs and the need for all lenders to focus on AVM validation to avoid unfavorable attention.