Posted by Jonathan J. Miller -Tuesday, March 13, 2012, 6:30 AM 3 Comments
A commercial appraiser I know passed along this press release from Bradford Technologies. We liked and used their MacAppraiser software back in the day when they were known as Bradford & Robbins and supported Macs. No disrespect meant to them specifically – I am referring to the state of the broader mortgage lending industry and their use and interaction with appraisers.
How on earth can the mortgage industry, who has successfully pushed the professional appraiser away from valuations through the use of appraisal management companies (who are more about bulk and cheap) than about professional quality, unleash a regression tool on the appraisal masses? Yes they will take a class or two to learn it, but this is way above the average skill set. The appraisal industry is still struggling with the selection of comparable sales.
Here are a few observations on this made by others on an advanced product like this:
This is just what the by-the-book residential appraiser ordered: a statistically supported valuation! A regression analysis that inputs all those hard to define variables like driving distance to a Starbucks, or economic conditions in Uzbekistan. We commercial appraisers have been stuffing reports with this garbage for years and look how much it has done for the reasonableness of our estimates.
…you can cut your overhead and staff…and sleep well at night-no doubt this is geared to the banking industry that will repeat all the mistakes of the past once the new generation of lending mavens is ensconced and they settle into their quota of what they have to lend for their P&L bonus pool (that’s the real regression analysis)
I have likened it to giving an appraiser a loaded gun.
Ok, got it?
BRADFORD TECHNOLOGIES BRINGS REGRESSION ANALYSIS TO RESIDENTIAL APPRAISALS [Working RE]
Posted by Jonathan J. Miller -Friday, October 7, 2011, 11:33 AM Comments Off
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When the world got the news about the loss of a great innovator, I got a little choked up and took a look at what his vision has meant to me. I’ve been in the Cult of Mac since 1986. Originally as contrarians, we originally built our appraisal firms Miller Samuel and Miller Cicero with Apple products. (confession: Mac appraisal software ceased to exist a few years ago so we were forced to convert to PC’s for Miller Samuel – except me)
I took a look back at my firm’s 25 years of history valuing real estate in New York City to draw some parallels. In reality, this is likely my attempt to pay homage to someone I’ve always admired greatly, so here goes:
Create a great product – people are attracted to great things in good times and bad. Think about the long lines for the new iPhone during the Great Recession. Think about buildings like 15 Central Park West in Manhattan that appreciated in value during recent rough economic times while other buildings sat idle.
Think Different – As an appraisal firm, Miller Samuel introduced many new ways of looking at Manhattan real estate over the years that we now take for granted: price per square foot, median sales price, number of bedrooms, days on market and other metrics that are now standard. It’s hard to imagine analyzing the market without these metrics, but we were criticized for each of them.
Learn from your mistakes – Steve Jobs was fired from the company he founded because he didn’t focus on the future. He learned from that experience and came back to push Apple to higher levels. In many ways, politics aside, our current mayor, Michael Bloomberg, has kept New York City focused on the future, working to make the city competitive on a global scale to remain an essential international destination, much like London.
Price/Cost does not equal value – Apple continually enjoys some of the highest profit margins in the industry because they conveyed their value to their customers. The opportunities afforded those who live in New York City usually outweigh the high cost of living in the city. If that weren’t true, there would be a population exodus in search of a lower cost of living. Instead, real estate has thrived over the long run as the city has instilled value in its residents.
He was rude, aggressive and unyielding, but people loved him – Why? Because he had a vision that was hard to argue against. New York City pushes people to perform and has a reputation for things such as not making eye contact with others on the street as they hurry to get somewhere. I never wish to attain Steve Jobs’ personality, but I do aspire to get things done.
See where the future will take us before anyone else does – After Steve Jobs was fired from Apple, he started a new computer company called Next. I remember the outcry when the new machines didn’t have floppy disk drives. Apple eventually bought the firm, bringing Jobs back, primarily for it’s unique software, which eventually became OSX and ultimately saved Apple, pushing it to higher levels. Back in 2005 and through 2009, I remember calling out the deteriorating conditions of the appraisal industry and the weakening housing market very publicly, and being regularly chastised for it. Those same individuals who criticized my commentary eventually realized the reality we were facing.
Many people identify with being “in the know” – Mac nuts like me thrive on this. I think people who live in or near New York are drawn here for that reason. I have family in other parts of the country that view New York as an exciting, but scary place, saying they would never want to live here. But when they visit, they get a sense of the energy and pace and wistfully talk about moving here.
Love and passion make hard work fun – Steve Jobs tirelessly pursued his vision. We spend one third of our life sleeping, so there isn’t time left to waste. Do we want to spend it bored and unhappy? New York City has been described as the “City that never sleeps” and “a city where you can buy fresh strawberries at 3am”. I’ve never had the urge to buy them at that hour, but people want to be here for the potential to do just that. It’s things they can’t ordinarily do elsewhere that build long term value into the housing market.
Why has New York City remained one of the best performing housing markets in the country? Because continues to be “insanely great”.
Posted by Jonathan J. Miller -Wednesday, October 5, 2011, 11:45 PM Comments Off
I was talking about the new iPhone 4S announced today with my wife and sons over dinner. I went to show my son the video on the new Siri app for the iPhone and saw Steve Job’s black and white image on the Apple site announcing his death – I clicked a few times not initially registering what it meant. Then a flurry of news alerts came on my iPhone and confirmed that he had passed.
We watched the CNN coverage and admittedly I got a little choked up. Cancer really sucks and touched my family’s life when my wife went through the whole process a little over 5 years ago.
Back in 1982-83, recently out of college and I walked into a computer store in suburban Chicago and bought an IBM PC Jr. I played around with it, but when visiting my boss’ house for a party, I saw his green screen adorned Apple PC.
In 1986 I walked into a Computerland Store on Third Avenue in Midtown Manhattan, intent on buying a computer to start our appraisal business. I was going to buy an IBM PC. However I saw the new Macintosh Plus and was hooked. Visits to MacWorld trade shows in Boston, New York and San Fran with my pregnant wife or Dad were bigger than any holiday.
We built our businesses with Apple products.
I always figured that if you spend a large part of your working life working with a computer, why work with an appliance? PC = toaster. Mac = an experience.
Posted by Jonathan J. Miller -Friday, March 4, 2011, 7:30 AM Comments Off
By my calculations (no pun intended), this year is the 30th anniversary of the HP12C. I wrote about the 25th anniversary 5 years ago on my former blog Soapbox back in 2006.
And today, after months of dealing with sticking keys on my HP12C, adorned with dents, scratches, scuffs, missing foot pads, a crud encrusted display after seemingly billions of keystrokes, I finally came to terms that it was time to retire it – which means keeping it in a safe place for posterity.
For a serial gadget person, I am surprised I stuck with a device of any kind for 25 years and only replaced it with an identical but new version.
I have one on my iPhone and one on my MacBook Pro, but its not the same as using old (new) reliable.
This year is the 25th anniversary of the launch of the HP 12c. I have had mine for about 20 years. The logo has been chipped off, two of the foot pads are missing, its scratched, dented and scuffed.
But it still works like a charm. I have purchased more powerful upgrades to the 12c by HP but I was soon back to my baby. Billions of numbers have shown through the dirty display and a whole lot of appraisals got done using this nifty tool. I have become protective of it, getting concerned when it gets swapped accidentally in the office with a newer one thats shiny, clean and unweathered. Its just not the same.
I have only changed my battery once in twenty years. I remember taking a Cap A class offered by the Appraisal Institute and the logic given for learning the J-Factor and K-Factor was that it would come in handy if you were on the witness stand as an expert and your HP 12c battery died. I kid you not.
The HP 12C was the world’s first horizontal financial calculator. Its innovative design and breakthrough Reverse Polish Notation (RPN) entry forever changed the way students and professionals reach their goals. After 25 years, this iconic calculator is still sold under its original name and model number and retains its world-famous horizontal design.
I even use the software equivalent on my laptop. In addition, my Mac OSX operating system allows me thankfully, to change the system calculator to use reverse polish notation (RPN)
Several residential appraisers filed a class action lawsuit against FNC a technology firm seeking damages for negligent misrepresentation, misappropriation, breach of implied contract and other charges.
Most appraisers, including my firm, use their AppraisalPort product to get and send appraisal assignments to our banking clients. They act as the toll collectors, charging us a fee for each report we send through the system. (In the early days of pdf report delivery my firm created our own secure report delivery system, dangerously named “MillerPort” which worked well but wasn’t to generate revenue and has long been put out to pasture.)
Posted by Jonathan J. Miller -Monday, October 25, 2010, 12:36 PM 3 Comments
This video has got to be the most accurate interpretation of the way we all walk around these days – who would have thought a 1960’s Donovan song could be so applicable? I doubt I would buy one of these phones (think Zune) but I did buy Donovan’s greatest hits.
Posted by Jonathan J. Miller -Thursday, July 22, 2010, 9:29 PM Comments Off
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I was reading my hometown newspaper tonight and I noticed a full back page ad for Halstead Properties showcasing its real estate listings, but something else as well. I took a double take when I noticed the phrase “Drone Helicopter Imagery” and the link Halstead.com/drone. Drones? Is this war or real estate?
In that moment, my world was turned upside down.
After a childhood and adult hood using remote control (R/C) boats and cars (sometimes actually with my kids), here was someone who made this technology into a business. My kids and I even tried Estes model rockets with the built in camera (that never worked).
This form of photography service would provide an additional perspective on the condition of the property and its placement on the site. Going forward as this service grows in popularity, the use of aerial photography will likely be expanded beyond large estate properties for more typical ones.
Posted by Jonathan Miller -Monday, May 3, 2010, 11:22 PM 1 Comment
Well its been a while since I looked at the seasonal search patterns tied to real estate via Google – very cool way to parse out consumer thinking on specific topics.
Clearly the surge of interest begins January 1 of each year but its also interesting to see total search volume slide since 2005. What’s even more interesting is to observe 2010 search levels, while consistent in pattern to prior years, is at its lowest level since the series began in 2004. Recovery?
“Rental” follows the same pattern as the overall real estate category – strong surge at beginning of the year, sharp fall off at end of year. The decline is not nearly as pronounced as “real estate”.
“Jobs” as a search term has been climbing since 2008 with some strange spikes in queries in recent months. This criteria seems to be the inverse of the “real estate” and “rental” trends.
“Unemployment” shows no seasonality – only a steep climb since mid-2008.
“Luxury goods” has shown a steady decline since peaking in 2005. Strange – I would have thought it would have peaked in 2007 or 2008 since credit enabled a “luxury” culture that wasn’t sustainable.
“Mortgage” begain to spike in 2008 and continued in 2009 as the lending net cast by banks for mortgages shrunk considerably. I believe the low level of queries reflects the frustration associated with tight credit – that the public doesn’t think things will improve soon and therefore search activity is at its lowest since 2004 when this series began.
Posted by Jonathan Miller -Tuesday, November 3, 2009, 11:46 PM Comments Off
I get to catch up with a long time colleague and real estate veteran John Heithaus, Senior Vice President of Sales, Marketing and REALTORÂ® Alliances at SentriLock.
He has twenty-nine years of experience in corporate relocation management and residential real estate. His career includes executive positions with Merrill Lynch Realty, Coldwell Banker Residential Brokerage and Relocation, Monster.com and Prudential Real Estate & Relocation.
I’m not quite ready to use the word “haunted” in my housing language, but I had a nice chat with Brian Sullivan and Mandy Drury of CNBC TV’s ‘Street Signs’ – 30 Rock is always quick walk from my office... Read More