Quote from @Ron Brady:
@Brad S. What you've shared here is thoughtful, clear and informative. I appreciate the facts, data and expertise you added to this dialogue and the professional manner in which you communicated it all.
You also persuaded me, with an assist from my wife, to adjust my thinking. Specifically:
. I would never settle on the terms the Millers did without the reasons I earlier articulated (tacit admission of guilt with a race-based component).
. You however, are an appraiser, from the area and have different lived experiences than I do and thus (as my wife shared) you'd have far more insight into how the Millers might think than I do.
Thus, what my lens tells me is a Millers guilt-admission, your lens tells you is something different and straightforward. I see that now and yes, can see that what the Austins (and I) consider "victory", the Millers (and others) see as moving along. And I guess that is how they came to reach a settlement on a difficult issue.
Thank you.
@Ron Brady
@Ron Brady
I do very much appreciate your open consideration to my potentially differing view on this situation. I highly respect you for being open to alternative viewpoints. :) I think it is important to be open to discussion, even with differing views.
If you are inclined, you can read some of my response to Steve K, where I add a little insight into part of the appraisal process. But, of course, it is not possible to fully eliminate bias from the equation. Just like you can't remove the observer from what is observed. But, I think it is in all our best interest, to consider alternative viewpoints, based on others' experience. After all, my sincere belief is we all generally want the same things.
I want to add a couple of points to this discussion. I am aware of the NFHA report on bias within appraisals. I have briefly reviewed it and found some interesting information I wasn't previously aware of. I found the historical references to bias in real estate based on "social and racial classes" disturbing and enlightening. I was also unaware that my own group is listed as having an unfavorable influence on a neighborhood, as stated in a list, within an appraisal manual, from 1946. But, I also noticed that most of those practices and ideas, appeared to be from around 75-90 years ago, and there was a court settlement in 1976, which included an appraiser group, agreeing to do more to combat bias in appraisals.
But, I take issue with the report then specifically briefly mentioning only one side of 5 anecdotal situations of appraisal discrepancy and stating they are examples of continuing "individual and systemic" bias. If these are truly reflection of racial bias, then they need to be put to more objective scrutiny. Only having 2 competing datapoints (2 differing appraisals) does not reflect anything specifically, except the pre-existing bias of the people interpreting them. Now, if there are multiple reviews of those reports and many more reports of those same properties with the same circumstances, etc, then we may have a glimpse of a trend or abcense of one.
In my 26 year professional experience, not once did I hear any instructor, colleague or anyone else in and around the appraisal profession, mention racial or social classes as a factor in an appraisal analysis. We are taught to look at "the data" and have the data lead us to our conclusions. We are very specifically chastised for not having a verifiable, reasonable basis for our opinions. Of course, we all have our own personal views, but we (appraisers) are supposed to form those views based on the evidence, not the other way around. An example would be: Someone saying that a house with a pool is worth more than one without. But, there are neighborhoods were that isn't true. It may be because the area has a lot of young families and the pools are seen as a liability to their infants, or maybe people don't want the additional upkeep of the pool, or they don't want it taking up yard space, etc. The data may reflect that houses with pools are actually selling for less. Same with 3 or 4 bedroom houses. Buyers may generally prefer 3 bedroom houses in an area, since they want larger bedrooms, or they may want 4 bedroom houses, since they want an office, etc. Point is, we look at the data to tell us, not the other way around.
I also have an issue that they are using census tracts as their basis for the study. Their are some inherent assumptions with that. One assumption is that somehow the census tract boundaries are succinctly representative of the specific racial or social class. Census tracts were first conceptualized in 1906 with most tracts defined by 1940. I am not aware of any changes since that time. So, basically, they are using a concept that was developed between 80-110 years ago, during periods of bias, as a framework to study the potential existence of that same bias. Does anyone see a potential problem with that! Also, I am unaware of any appraisers that use census tracts for anything in an appraisal, except for stating them, since that is required by the lender.
Another issue I have is that it seems pretty biased to assume that the bias in inherent within the appraisal itself, as opposed to the appraisal reflecting other potential issues. Appraisals are supposed to be reflective, but it seems like the only magnifying glass is on the appraisers and not on any underlying cause of potential lower values in specific areas. Meaning, maybe the lower appraisals are actually reflecting an actual lower appeal and/or affordability of houses in those neighborhoods. But, the actual reasons for those issues are not likely to be directly addressed if they are outshadowed by diversions.
By the way, higher appraisals are likely to be detrimental to many current or prospective homeowners, as well. If a homeowner is in a state that doesn't have property tax assessment limits, homeowners may find their property taxes increasing substantially as their home valuation goes up. Also, it may put additional affordability pressure on homebuyers, as those values rise. Yes, it will also be beneficial to homesellers and refinancing, but my point here is, if there are certain policies pushed which unnaturally force higher valuations, as opposed to allowing market forces to determine values, it may cause unneeded/unwarranted harm.
Ok, I may be about done with this thread for now. LOL
