Newz: Why AI Can’t Replace Appraisers,
Value: Absolute or Relative?
October 3, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Weather Impact
- Five Reasons AI Cannot Replace Real Estate Appraisers, By Timothy Andersen
- Malibu (CA) Waterfront Home for $110,000,000
- How Bureaucratic Overreach Turned Real Estate Appraisers into Scapegoats
- September 2025 Housing Market Updates for Appraisers
- Value: Relatively Absolute or Absolutely Relative?, By Brent Bowen
- Mortgage applications decreased 12.7 percent from one week earlier
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Five Reasons AI Cannot Replace Real Estate Appraisers
by Timothy Andersen
Excerpts:
QUESTION: When I got involved in real estate appraisal, nobody ever told me about AI, UAD 3.6, AVMs, and all the changes that would take place. I can’t keep up with these changes and the changes I will have to make to the way I appraise and report those appraisals. Please tell me there is some good news out there about the way I have chosen to make a living! Is there any such news?
RESPONSE: Traditionally, when there were questions of real property value, the party with the questions called a real property appraiser to answer them. Real estate appraisers are professionals who estimate the value of properties like homes or land. They are trained, licensed experts who visit properties, study local markets, and follow ethical rules to make fair valuations. Lately, artificial intelligence (AI) and computer models called Automated Valuation Models (AVMs) are helping estimate property values, thus possibly decreasing the demand for real estate appraisers.
From your question, you are asking if these innovations in AI are going to take your job. In all candor, AI is going to take some appraisal jobs. But the good news is that, with some upgrading on your part, that should not be a worry.
Reason 1
One reason you’ll get all the credit (or blame) is that humans exercise judgment, follow ethics, and accept responsibility. Algorithms cannot execute these since, to some extent, judgment, responsibility, etc. have an emotional component to them, rather than purely logic or reason. Remember, AI is a tool to help you. In so many ways it cannot replace you (nor was that its design).
Reason 2
One reason you’ll get all the credit (or blame) is that humans exercise judgment, follow ethics, and accept responsibility. Algorithms cannot execute these…
Reason 3
One reason it cannot replace you is simply because AI (i.e., AVMs) struggles with unique or complex houses, especially if those are rural properties…
Conclusion
At this point in the response, you rightly ask, “What does any of this have to do with me!?” That answer is essentially up to you….
To read more, Click Here
My comments: What AI means for your appraisals (and many jobs) can be scary. This article is understandable and comprehensive. Worth reading the details.
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Malibu (CA) Waterfront Home for $110,000,000
Excerpts: 5 bedrooms, 11 baths, 7,083 sq.ft., 4.2 Acre Lot, Built in 1980.
Excerpts: once home to legendary host Johnny Carson, this extraordinary compound spans over four pristine acres across four parcels, commanding panoramic views of the Pacific Ocean, Queen’s Necklace, and Paradise Cove.
Designed by renowned architect Edward R. Niles, the residence is a sculptural interplay of glass, wood, and geometry, a modernist composition that rises dramatically above the bluffs.
At its heart lies an awe-inspiring arboretum pavilion, where a soaring 30-foot glass ceiling latticed with wood slats floods the interiors with natural light.
For more information and see 23 photos, Click Here
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How Bureaucratic Overreach Turned Real Estate Appraisers into Scapegoats
This is what bureaucratic overreach looks like: a maze of rules with no exit, a hearing held while you’re hospitalized, a lawsuit dismissed but still billed. Bureaucratic overreach isn’t a policy flaw, it’s a strategy.
If you’re a real estate appraiser in 2025, odds are you’ve already met Kafka. Not in a literature class, but in your inbox, via a letter from HUD, a complaint from a borrower, or a summons from a regulatory agency that’s decided your opinion of value is now a civil rights issue.
The federal government isn’t just investigating appraisers, it’s industrialized the process. Hundreds of licensed professionals are now entangled in HUD probes triggered by little more than a borrower’s disappointment or an activist’s press release. The complaints don’t need merit, just momentum. The goal isn’t justice, it’s leverage. The strategy? Exhaust, intimidate, and isolate.
Take Ken Mullinix, a seasoned appraiser with 35 years of experience. He’s been under investigation for years by HUD over a value opinion someone didn’t like. The agency has deployed contractors, who look, act, and email like federal employees but aren’t bound by federal conflict of interest rules, to dig into his work. The result? A scorched earth campaign where the process itself is the punishment.
Then there’s Shane Lanham, a Maryland appraiser who successfully defended himself against a baseless bias lawsuit.
And now, meet Julie Friess, SRA, a seasoned expert in the appraisal world who’s worn nearly every hat the profession offers. USPAP instructor, litigation expert, course developer, editorial board member, diversity advocate, speaker, writer, mentor. Her resume reads like a blueprint for what it means to know this profession inside & out. But none of it mattered when the Arizona Department of Insurance and Financial Institutions, AZDIFI, came for her…
To read more, Click Here
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UAD 3.6 Articles in Appraisal Today
From UAD 2.6 to UAD 3.6. What appraisal software vendors are doing. I had live demos where I asked specific questions for a la mode, SFREP and Bradford.
What is new in the New URAR I go through the Single Family Report /sr-1
I list the many changes on each page.
Review of Appraiser’s Guide to the New URAR Class
I took the class. Overwhelming! Maybe you can get a class with two smaller sessions a day or so apart.
Software Update coming in November, 2025 newsletter. New software vendors. When their report software will be ready to use, status of inspection app for UAD 3. What is happening with the September 8 Limited Production, and more
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September 2025 Housing Market Updates for Appraisers
By Kevin Hecht, Appraiser and Economist
Excerpts: The housing market in September 2025 stands at a crossroads, with the third quarter closing on a note of cautious optimism. A recent Federal Reserve rate cut, a surprising surge in new home sales, and steady builder confidence signal potential momentum. Yet, rising inventory, decelerating prices, and demographic shifts point to an uneven recovery.
For real estate appraisers, these dynamics underscore the need for precision in analyzing local data, applying time adjustments, and understanding the interplay of supply, demand, and economic policy.
Let’s explore the key trends shaping the market and their implications for appraisal practice.
Topics: Every topic ends with section on “Implication for appraisers:
- Fed Easing Begins: A Gradual Boost for Housing
- New Home Sales Surge, But Starts Lag
- Builder Sentiment Holds, Expectations Rise
- Demographics Shape Long-Term Trends
Implication for appraisers: Softer demand from fewer young buyers and more Boomer-owned homes coming online suggest price moderation. Adjust for aging-in-place trends in senior-heavy markets and factor immigration into growth projections for cost and income approaches.
To read more, Click Here
My comments: I regularly read articles on these topics, but this is the only one written for appraisers. Other articles are for buyers/sellers, real estate agents and mortgage companies. I always read this one, since I am an appraiser and not a buyer, seller, a real estate agent or mortgage loan officer.
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Value: Relatively Absolute or Absolutely Relative?
By Brent Bowen
Excerpts: What should be considered absolute in valuation, and what should be considered relative? What happens if we err in those categories? What is the guiding principle which should drive appraisers in our decision making?
A particular home may be 100 sq ft larger than a comparable property that a buyer is considering. That is an absolute measure, but in order to understand the implications of that difference, a relative consideration is needed. How is that potential buyer going to react to that 100 sq ft? The absolute measure describes the ‘what’, whereas the relative measure defines the ‘so what’. In other words, that 100 sq ft absolutely exists, but its importance to that particular buyer is relative. The question of how much utility there is to that particular buyer can only really be considered relative to the perceived utility of other homes which that buyer has considered (even if that consideration has only been in their imagination). So, relativizing the absolute, any prediction of human marketplace behavior will regularly fail.
A particular home may be 100 sq. ft. larger than a comparable property that a buyer is considering. That is an absolute measure, but in order to understand the implications of that difference, a relative consideration is needed. How is that potential buyer going to react to that 100 sq ft? The absolute measure describes the ‘what’, whereas the relative measure defines the ‘so what’. In other words, that 100 sq ft absolutely exists, but its importance to that particular buyer is relative.
The question of how much utility there is to that particular buyer can only really be considered relative to the perceived utility of other homes which that buyer has considered (even if that consideration has only been in their imagination). So without relativizing the absolute, any prediction of human marketplace behavior will regularly fail.
To read more, Click Here
My comments: Worth reading. I had never heard about what is discussed in this article using this terminology. Comments on UAD 3.6 are also included.
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, Click Here.
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. We are all waiting for rates to drop in 2025.
Mortgage applications decreased 12.7 percent from one week earlier
WASHINGTON, D.C. October 1, 2025) — Mortgage applications decreased 12.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 26, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 12.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 13 percent compared with the previous week. The Refinance Index decreased 21 percent from the previous week and was 16 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 16 percent higher than the same week one year ago.
“Mortgage rates increased to their highest level in three weeks as Treasury yields pushed higher on recent, stronger than expected economic data. After the burst in refinancing activity over the past month, this reversal in mortgage rates led to a sizeable drop in refinance applications, consistent with our view that refinance opportunities this year will be short-lived,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “With the 30-year fixed rate now at 6.46 percent, refinance activity declined for all loan types, including a 22 percent decrease in conventional refinances and 27 percent decrease in VA refinances. The average loan size for refinances dropped to $380,100 from $461,300 two weeks ago as these higher rates eliminated the refinance incentive for many borrowers with large loans.”
Added Kan, “Purchase applications were down slightly over the week after three consecutive increases, but the strength of the purchase market has also been impacted by other factors such as broader economic conditions, the health of the job market, and housing inventory.”
The refinance share of mortgage activity decreased to 55.0 percent of total applications from 60.2 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.4 percent of total applications.
The FHA share of total applications increased to 16.8 percent from 15.7 percent the week prior. The VA share of total applications decreased to 16.2 percent from 17.5 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.46 percent from 6.34 percent, with points increasing to 0.61 from 0.57 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) increased to 6.54 percent from 6.44 percent, with points increasing to 0.40 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.24 percent from 6.14 percent, with points increasing to 0.76 from 0.74 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 15-year fixed-rate mortgages increased to 5.76 percent from 5.70 percent, with points decreasing to 0.68 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 5.74 percent from 5.53 percent, with points decreasing to 0.46 from 0.49 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.
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Ann O’Rourke, MAI, SRA, MBA
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Email: ann@appraisaltoday.com
Online: www.appraisaltoday.com
