In 2013 and 2014 I did a study on variances (often called “error rates”) in real estate valuation. There have been many such studies over the years, but in this project I also research price variances in the market. My research illustrates that the market itself is imprecise, therefore we should expect a lack of precision in valuations as well. The paper, The Adverse Effects of Single Approach Appraisals and Single Point Valuations, proposes a return to valuation fundamentals coupled with more recently developed statistically based analytics to produce more reliable residential appraisals.

In another paper related to the paper on error rates, Appraisal Bias and Appraisal Pressure – Why All Appraisals are Always Wrong, I argue that the current appraisal process has created a lack of confidence in the appraisal profession; it is the process rather than the people that creates this lack of confidence. Appraised values are best communicated as a range of values rather than as a pinpoint number, and there must be more than one leg on the stool. Two or more approaches to value, coupled with other “big data” solutions must be adopted to restore confidence to the valuation process.

Our survey of mortgage lending for September of 2015 shows that 43.6% of new applications were for purchase transactions, down from 47.2% in August. This figure has been relatively stable through most of 2015 and is consistent with expectations given the persistence of interest rates below 4%. Many prognosticators continue to predict higher rates through 2016 and with higher rates, fewer refinance loans. Freddie Mac projects total mortgage volume for 2016 to be slightly lower than 2015 ($1.40 Trillion in 2016 versus $1.53 Trillion in 2015), but purchase volume will be up, accounting for roughly 70% of all originations.


What is Real Estate?

I am the basis of all wealth, the heritage of the wise, the thrifty and the prudent. I am the poor man’s joy and comfort, the rich man’s prize, the right hand of capital, the silent partner of many thousands of successful men and women.

I am the solace of the widow, the comfort of old age, the cornerstone of security against misfortune and want. I am handed down to children, through generations, as a thing of greatest worth. I am the choicest fruit of toil. Credit respects me. Yet I am humble, I stand before every man bidding him know me for what I am. I grow and increase in value through countless days. Though I seem dormant, my worth increases, never failing, never ceasing.

Time is my aid and population heaps up my gain. Fire and the elements I defy, for they cannot destroy me. My possessors learn to believe in me; invariably they become envied. While other things wither and decay, I survive. The centuries find me younger, increasing my strength. the thriftless speak ill of me. The charlatans of finance attack me. I am trustworthy. I am sound. Unfailingly I triumph and my detractors are disproved. Minerals and oils come from me. I am the factories, the foundation of banks.

Yet I am so common that thousands, unthinking and unknowing, pass me by.

I am Real Estate.

~ Anonymous

The site name derives from an introduction made by a colleague of mine some years ago. In explaining what I do, he said simply “if it has to do with dirt (real estate), Bill probably knows something about it.” It is gratifying to be held in such regard, and at the same time, it sets a high bar and serves to remind me that only hard work and relentless dedication to the highest standards will allow me to maintain such regard.

I have been involved in the real estate profession since 1979 and have had the privilege of serving a wide range of clients covering most property types and situations. My approach is relatively simple – discover the nature and scope of the real estate problem and determine what is needed to solve the problem. Often, teaming with other real estate professionals with specialized expertise is the best way to approach things, but in every case, the best interests of the client remain the top priority.