Tag: AVMs

#1 AVM in Each County Updated for Q3 2024

Every quarter we analyze all the top independently tested AVMs and compile the results. Click on this GIF to see the top AVM in each county for each quarter. As you watch the quarters change, you can see that the colors representing the top honors change frequently.

The main point is how frequently AVM performance changes. That should be no surprise, since market conditions change, and AVM’s have different strengths and tendencies. In Q3, AVMetrics independently tested 24 models; however, the GIF only highlights the 13 models that ranked in the top position of the MPTs. At least 11 AVMs shouldn’t be anyone’s first choice ANYWHERE, but they still have customers, presumably customers who don’t know the real performance of their AVMs. AVM Vendors and resellers are not Independent referees.

Independent testing is the only way to know how AVMs perform. This past quarter we saw several models retire while whole new models were introduced. Every model is constantly being improved as builders add new data feeds and use new techniques to get better results (with respect to new techniques, over at the AVMNews, we curate articles about AVMs, and we highlight several dozen new research articles about AVMs every year).

Q3 Change Highlights- Quarterly Trends Across the Coast 

As ever, if you watch a part of the map, you’ll see several changes. But, in Q3, as markets stabilized at higher interest rate levels, we saw a changing of the guard. Here are some places to watch:

  1. In the Golden State, one of the highest priority counties in state has a new king, Los Angeles.  Inyo, Imperial, King, and Tulare counties also changes hands (just to name a few).
  2. Several less-populated states had almost wholesale changes, such as the Dakotas, Alaksa, Montana, Wyoming, Nebraska, Oklahoma and Kansas.
  3. In the Sunshine State models were able to value several smaller counties that were not captured by models in Q2 including Collier, Columbia,  Okeechobee, Suwannee, and Union. 

Takeaways

Things change – a lot. Don’t rely on the results from last year or earlier this year. Heck, you can’t even trust last quarter! Often, 3 months’ of data are required to get a large enough sample in smaller regions, but we can slice it every way imaginable.

Use more than one AVM. It’s not obvious from a map showing just one AVM in each county, but if you think about what’s going on to produce these results, you’ll realize that AVMs have different strengths and there are a lot of them climbing all over each other to get to the top of the ranking. So, when you’re valuing a particular property, you just don’t know if it will be a good candidate for even the best AVM. When that AVM produces a result with low confidence, there’s a very good chance that another AVM will produce a reasonable estimate.

Use the right AVM for each use case and keep testing, because things change a lot and often.

#1 AVM in Each County Updated for Q2 2024

Every quarter we analyze all the top AVMs and compile the results. Click on this GIF to see the top AVM in each county for each quarter. As you watch the quarters change, you can see that the colors representing the top honors change frequently.

The main point is how frequently AVM performance changes. That should be no surprise, since market conditions change and AVM’s have different strengths and tendencies. Phoenix has more tract housing, and some AVMs are optimized for that. Cities in the northeast have more row housing, and some models are better there. But AVMs also change – a lot. Whole new models are introduced, but every model is constantly being improved as builders add new data feeds and use new techniques to get better results (with respect to new techniques, over at the AVMNews, we curate articles about AVMs, and we highlight several hundred new research articles about AVMs every year).

Q2 Change Highlights

As ever, if you watch a part of the map, you’ll see several changes. In Q2, we saw a changing of the guard. Here are some places to watch:

  1. In Texas, most counties changed leadership. The counties that include Austin and its suburbs changed leadership. Not Dallas, but most of the counties around Dallas, and not Houston (Harris), but most of the counties around Harris County changed leadership.
  2. Much of Alaska, and the West Coast changed leadership.
  3. Some less-populated areas had almost wholesale changes, such as Colorado, Nevada, New Mexico, the Dakotas, rural Michigan, Illinois, Missouris, Arkansas, Louisiana, Mississippi and more.

Takeaways

  1. Things change – a lot. Don’t rely on the results from last year. Heck, you can’t even trust last quarter! We compile these results quarterly, but our testing is non-stop, and we can produce new optimizations monthly based on a rolling 3 months or any other time period. Often, 3 months’ of data are required to get a large enough sample in smaller regions, but we can slice it every way imaginable.
  2. Use more than one AVM. It’s not obvious from a map showing just one AVM in each county, but if you think about what’s going on to produce these results, you’ll realize that AVMs are climbing all over each other to get to the top of the ranking. So, when you’re valuing a particular property, you just don’t know if it will be a good candidate for even the best AVM. When that AVM produces a result with low confidence, there’s a very good chance that another AVM will produce a reasonable estimate. Why not be able to take three, four or five bites at the apple?

Feds to Lenders: Take AVMs Seriously

Regulators are signaling that they are going to be looking at how AVMs are used and whether lenders have appropriately tested them and continuously monitor them for 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 from government regulators.

On Feb 12, the FFIEC issued a statement on examinations from regulators. It specifically stated that it didn’t represent a change in principles, nor a change in guidance, and not even a change in focus. It was just a friendly announcement about the exam process, which will focus on whether institutions can identify and mitigate bias in residential property valuations.

Law firm Husch Blackwell published their interpretation a week later. Their analysis included consideration of the June 2023 FFIEC statement on the proposed AVM quality control rule, which would include bias as a “fifth factor” when evaluating AVMs. They interpret these different announcements as part of a theme, an extended signal to the industry that all valuations, and AVMs in particular, are going to receive additional scrutiny. Whether that is because bias is as important as quality or because being unbiased is an inherent aspect of quality, the subject of bias is drawing attention, but the result will be a thorough examination of all practices around valuation, including AVMs, from oversight to validation, training, auditing, etc.

AVM quality has theoretically been an issue that could be enforced by regulators in some circumstances for over a decade. What we’re seeing is not just an expansion from accuracy into questions of bias. We’re also seeing an expansion from banks into all lenders, including non-bank lenders. And, they are signaling that examinations will focus on bias, which is an expansion from the theoretical requirement to an actual, manifest, serious requirement.

#1 AVM in Each County Updated for Q1 2024

Every quarter we analyze all the top AVMs and compile the results. Click on this GIF to see the top AVM in each county for each quarter. As you watch the quarters change, you can see that the colors representing the top honors change frequently.

GIF that depicts a changing map of the United States with colors representing the #1 AVM in each county. Each quarter, the colors change reflecting the changing #1 AVM. They change frequently and dramatically, demonstrating how dynamic AVM performance is.
Click the map to see how the #1 AVM in each county changes frequently.

The main point is how frequently AVM performance changes. That should be no surprise, since market conditions change and AVM’s have different strengths and tendencies. Phoenix has more tract housing, and some AVMs are optimized for that. Cities in the northeast have more row housing, and some models are better there. But AVMs also change – a lot. Whole new models are introduced, but every model is constantly being improved as builders add new data feeds and use new techniques to get better results (with respect to new techniques, over at the AVMNews, we curate articles about AVMs, and we highlight several hundred new research articles about AVMs every year).

Q1 Change Highlights

As ever, if you watch a part of the map, you’ll see several changes. In Q1, markets continued to grind along with higher interest rates. We saw a changing of the guard. Here are some places to watch:

  1. In Texas, most counties changed leadership. The counties that include Austin and its suburbs changed leadership. Not Dallas, but most of the counties around Dallas, and not Houston (Harris), but most of the counties around Harris County changed leadership.
  2. Much of rural California, Oregon and Washington changed leadership.
  3. Some less-populated areas had almost wholesale changes, such as Colorado, Nevada, New Mexico, the Dakotas, rural Michigan, Illinois, Missouris, Arkansas, Louisiana, Mississippi and more.

Takeaways

  1. Things change – a lot. Don’t rely on the results from last year. Heck, you can’t even trust last quarter! We compile these results quarterly, but our testing is non-stop, and we can produce new optimizations monthly based on a rolling 3 months or any other time period. Often, 3 months’ of data are required to get a large enough sample in smaller regions, but we can slice it every way imaginable.
  2. Use more than one AVM. It’s not obvious from a map showing just one AVM in each county, but if you think about what’s going on to produce these results, you’ll realize that AVMs are climbing all over each other to get to the top of the ranking. So, when you’re valuing a particular property, you just don’t know if it will be a good candidate for even the best AVM. When that AVM produces a result with low confidence, there’s a very good chance that another AVM will produce a reasonable estimate. Why not be able to take three, four or five bites at the apple?

#1 AVM in Each County Updated for Q4 2023

Every quarter we analyze all the top AVMs and compile the results. Click on this GIF to see the top AVM in each county for each quarter. As you watch the quarters change, you can see that the colors representing the top honors change frequently.

A gif showing the most recent 8 quarters of AVM performance with the #1 AVM in each county represented by a unique color
The number 1 AVM in each county for the last two years. Each AVM is represented by a unique color.

The main point is how frequently AVM performance changes. That should be no surprise, since market conditions change and AVM’s have different strengths and tendencies. Phoenix has more tract housing, and some AVMs are optimized for that. Cities in the northeast have more row housing, and some models are better there. But AVMs also change – a lot. Whole new models are introduced, but every model is constantly being improved as builders add new data feeds and use new techniques to get better results (with respect to new techniques, over at the AVMNews, we curate articles about AVMs, and we highlight several hundred new research articles about AVMs every year).

Q4 Change Highlights

As ever, if you watch a part of the map, you’ll see several changes. But, in Q3, as markets stabilized at higher interest rate levels, we saw a changing of the guard. Here are some places to watch:

  1. On the the west coast, leadership changed in Los Angeles County and Seattle’s King County.
  2. Most of the counties of Atlanta, GA changed, as did the main counties of Charlotte, NC.
  3. Some less-populated areas had almost wholesale changes, such as Idaho, the Dakotas, Montana, Colorado, Iowa and rural Michigan (but not New Mexico or Utah).

Takeaways

  1. Things change – a lot. Don’t rely on the results from last year or earlier this year. Heck, you can’t even trust last quarter! We compile these results quarterly, but our testing is non-stop, and we can produce new optimizations monthly based on a rolling 3 months or any other time period. Often, 3 months’ of data are required to get a large enough sample in smaller regions, but we can slice it every way imaginable.
  2. Use more than one AVM. It’s not obvious from a map showing just one AVM in each county, but if you think about what’s going on to produce these results, you’ll realize that AVMs have different strengths and there are a lot of them climbing all over each other to get to the top of the ranking. So, when you’re valuing a particular property, you just don’t know if it will be a good candidate for even the best AVM. When that AVM produces a result with low confidence, there’s a very good chance that another AVM will produce a reasonable estimate. Why not be able to take three, four or five bites at the apple?