Valuations in a tech-enabled future
What will clients want from valuers and valuations in a tech-enabled future? Sander Scheurwater reviews the latest research findings.
17 DEC 2018
So much is said about the ingestion of technology in the valuation world. Data aggregation; proptech; artificial intelligence; cryptocurrency; blockchain, these and many other buzzwords accompany any discussion surrounding value and the valuation professional. Where are we heading, and where does the valuation professional fit in an environment focused on technology?
In its simplest form, data is a collection of facts, quantities, or observations that, unto itself, is nothing more than that. But when organized or structured, the compilation of data leads to information. In effect, information is the context in which data has meaning. Therefore, the true contribution of the valuation professional lies in not only the observation of the data, but also the confirmation and interpretation of the information. The valuer's insight is what allows data and information to become knowledge... and knowledge is powerful.
Advances in technology, and the growth of proptech companies, are leading to an enhanced ability to capture and organize data. The valuer, therefore, is able to focus on imparting knowledge - observe trends, improve predictive analyses, and be the "trusted advisor" that clients are expecting. In effect, the knowledge, and not the product, is what makes the valuer, well, valuable.
The valuer’s insight is what allows data and information to become knowledge…and knowledge is powerful.
As technology advances efficiencies in process, all real estate practitioners will be compelled to adopt and accelerate relationships with tech firms (such as the Cushman & Wakefield partnership with MetaProp). Data mining tools, public data ingestion tools, and artificial intelligence will continue to evolve and will improve our ability convert data to information and information to knowledge.
Are there concerns? Absolutely.
Will data algorithms replace the valuer? While many believe this to be true, and in some areas it very well may, there remains an unqualified need for insight and market intelligence that cannot be supplanted by data extraction.
Although valuers are challenged to keep pace with technology, the benefits far outweigh the investment. Tech-enabled processes will continue to improve efficiencies. Blockchain will improve transparency; often a challenge in the real estate world. Artificial intelligence will enhance our ability to ascertain trends. Organizations, such as RICS, are well-positioned to provide the education and retooling needed to compete.
At the end of the day, it is critical that valuers remain focused on their clients’ needs. As clients adopt technology enablement, the valuer’s role as an advisor becomes that much more important.
James J. Moran, MAI, CRE, CCIM, FRICS, Chief Strategy Officer, Valuation & Advisory Americas
James Moran is a Chief Strategy Officer at Cushman & Wakefield. He is an Executive Managing Director with global oversight and responsibilities within the Valuation & Advisory group. He is also the Chair of the Business Practices Committee and oversees Governance matters for Valuation & Advisory.