BUSI344 CHAPTER 9 & 10 Flashcards
Geographic Information Systems (GIS) were developed for spatial analysis needs such as _______, _______, and __________. GIS can completely integrate spatial data and attribute data among different layers. The GIS approach is ideal for multipurpose users.
Geographic Information Systems (GIS) were developed for spatial analysis needs such as planning, natural resources, and land records management. GIS can completely integrate spatial data and attribute data among different layers. The GIS approach is ideal for multipurpose users.
Of the three computerized mapping systems, GIS is the most commonly used by the real estate industry.
Hedonic.
Hedonic systems are the most common AVMs and are largely based on statistical models using some form of linear regression. These models require information on property attributes, such as location, property size, and nature of improvements. The hedonic AVM includes a search engine that compares the subject property attributes (contained in a database) with other comparable properties using a “radius”search pattern or other logical search parameters, over a pre-determined time period. AVMs developed by Landcor and MPAC (Municipal Property Assessment Corporation) are examples of hedonic systems
Hedonic.
Hedonic systems are the most common AVMs and are largely based on statistical models using some form of linear regression. These models require information on property attributes, such as location, property size, and nature of improvements. The hedonic AVM includes a search engine that compares the subject property attributes (contained in a database) with other comparable properties using a “radius”search pattern or other logical search parameters, over a pre-determined time period. AVMs developed by Landcor and MPAC (Municipal Property Assessment Corporation) are examples of hedonic systems
REIPA released a document entitled “Systemic Risks in Residential Property Valuations: Perceptions and Reality”.
In this paper, the REIPA set out to test a number of perceptions about AVMs and conventional appraisals
The research indicated that conventional appraisals result in values greater than the sale price more often than AVMs, particularly in a soft market.
This outcome suggests that AVMs maybe more “immune” to bias and more independent than conventional appraisals. The concern that data lags associated with AVMs will also result in over-valuation in soft markets does not appear to be valid either.
The authors note that one explanation for this outcome is that vendors are slow to reduce prices in soft market conditions. This downward rigidity in home prices means that market prices may decelerate or decline at a slower pace than appears warranted by the level of demand.
REIPA released a document entitled “Systemic Risks in Residential Property Valuations: Perceptions and Reality”.
In this paper, the REIPA set out to test a number of perceptions about AVMs and conventional appraisals
The research indicated that conventional appraisals result in values greater than the sale price more often than AVMs, particularly in a soft market.
This outcome suggests that AVMs maybe more “immune” to bias and more independent than conventional appraisals. The concern that data lags associated with AVMs will also result in over-valuation in soft markets does not appear to be valid either.
The authors note that one explanation for this outcome is that vendors are slow to reduce prices in soft market conditions. This downward rigidity in home prices means that market prices may decelerate or decline at a slower pace than appears warranted by the level of demand.
Maps: The Basis of GIS
**The story of GIS begins in the world of maps. A map is a simplified visual representation of real things from the real world. However, maps can model the world in more than one way - consider the figure below.
Topographic maps show physical surface features, such as roads, rivers, and buildings.**
Contour maps use lines to group together locations that have the same attribute value, for example, height above sea level or isobars showing air pressure.
Choropleth maps use shading, patterns, or colours to highlight areas characterized by some general common feature, for example, political maps or agricultural crop types.
Maps: The Basis of GIS
**The story of GIS begins in the world of maps. A map is a simplified visual representation of real things from the real world. However, maps can model the world in more than one way - consider the figure below.
Topographic maps show physical surface features, such as roads, rivers, and buildings.**
Contour maps use lines to group together locations that have the same attribute value, for example, height above sea level or isobars showing air pressure.
Choropleth maps use shading, patterns, or colours to highlight areas characterized by some general common feature, for example, political maps or agricultural crop types.
AVMs based on __________ are very simple models. These models are generally based on repeat-sales to generate a _________ for a specific geographic area, usually defined by zip or postal code.
AVMs based on price indices are very simple models. These models are generally based on repeat-sales to generate a price index for a specific geographic area, usually defined by zip or postal code.
Geographic information can be accessed, transferred, transformed, overlaid, processed, and displayed using numerous software applications.For example, mountains have attributes like elevation and area,while countries have attributes like poverty, growth rates, and age groups. GIS works with large databases to manage these associations, which as a whole are known as geographically referenced information. Once a GIS has finished the often elaborate process of associating attribute data with geographic features, the results can be visualized in the form of a map.
Geographic information can be accessed, transferred, transformed, overlaid, processed, and displayed using numerous software applications.For example, mountains have attributes like elevation and area,while countries have attributes like poverty, growth rates, and age groups. GIS works with large databases to manage these associations, which as a whole are known as geographically referenced information. Once a GIS has finished the often elaborate process of associating attribute data with geographic features, the results can be visualized in the form of a map.
The evolution of AVMs has followed two distinct paths: public sector property assessment applications and a separate private sector focus on residential lending risk analysis.Assessors were early adopters of electronic data processing technology and began experimenting with AVMs in the early 1960s.
Keep in mind that assessors do not generally use the term AVM, but commonly use the term CAMA or computer-assisted mass appraisal. Specific CAMA systems, whether vendor developed or designed and built in-house, are somewhat analogous to different types of AVMs.For example, the CAMA system that an assessment jurisdiction may use will generally include multiple types of AVMs to provide for the unique requirements of residential, commercial, utility, and other specialized property valuations.
The evolution of AVMs has followed two distinct paths: public sector property assessment applications and a separate private sector focus on residential lending risk analysis.Assessors were early adopters of electronic data processing technology and began experimenting with AVMs in the early 1960s.
Keep in mind that assessors do not generally use the term AVM, but commonly use the term CAMA or computer-assisted mass appraisal. Specific CAMA systems, whether vendor developed or designed and built in-house, are somewhat analogous to different types of AVMs.For example, the CAMA system that an assessment jurisdiction may use will generally include multiple types of AVMs to provide for the unique requirements of residential, commercial, utility, and other specialized property valuations.
Strengths
As we learned earlier, the driving force that led to the rise of AVMs was the competitive pressure to deliver mortgage appraisals faster and cheaper than “live appraisers”.The artificial intelligence of AVMs illustrates that it is possible, with some limitations, to use a computer program to model appraiser judgment to deliver consistent, inexpensive results, particularly with large volumes of data. AVMs are not limited to one valuation method and some will deliver multiple valuations for a specific property, also determining the best approach given the property type, location, and data availability. As well, given ongoing concerns about mortgage fraud, an AVM cannot commit fraud or make mistakes with calculations. AVMs can even be designed to evaluate and rank other AVMs, which in some ways is a metaphor of the future depicted in Isaac Asimov’s I Robot.
In 2006, Bench Mark Consulting International published a Home Equity Lending Study for the Consumer Bankers Association. A key finding in the study was that the time taken for an appraisal was reduced from the traditional 7-10 days for an in-person in-home appraisal to just 30 seconds. Benchmark concluded that this factor was the major contribution to a 30% reduction in loan turnaround time between 2003 and 2005.
AVM vendors pitch the major strength of AVMs as providing information that clients want versus what appraisers and others have decided they need.These desires include reduced administrative expense and more indepth exposure to market trends. George Dell notes that larger lenders see advantages to an improved “supply chain” since they only need to deal with a few AVM vendors, rather than a large number of small appraisal firms. The problems and costs in managing a large number of suppliers are eliminated by dealing with large national AVMs.
Strengths
As we learned earlier, the driving force that led to the rise of AVMs was the competitive pressure to deliver mortgage appraisals faster and cheaper than “live appraisers”.The artificial intelligence of AVMs illustrates that it is possible, with some limitations, to use a computer program to model appraiser judgment to deliver consistent, inexpensive results, particularly with large volumes of data. AVMs are not limited to one valuation method and some will deliver multiple valuations for a specific property, also determining the best approach given the property type, location, and data availability. As well, given ongoing concerns about mortgage fraud, an AVM cannot commit fraud or make mistakes with calculations. AVMs can even be designed to evaluate and rank other AVMs, which in some ways is a metaphor of the future depicted in Isaac Asimov’s I Robot.
In 2006, Bench Mark Consulting International published a Home Equity Lending Study for the Consumer Bankers Association. A key finding in the study was that the time taken for an appraisal was reduced from the traditional 7-10 days for an in-person in-home appraisal to just 30 seconds. Benchmark concluded that this factor was the major contribution to a 30% reduction in loan turnaround time between 2003 and 2005.
AVM vendors pitch the major strength of AVMs as providing information that clients want versus what appraisers and others have decided they need.These desires include reduced administrative expense and more indepth exposure to market trends. George Dell notes that larger lenders see advantages to an improved “supply chain” since they only need to deal with a few AVM vendors, rather than a large number of small appraisal firms. The problems and costs in managing a large number of suppliers are eliminated by dealing with large national AVMs.
During the development of AUs, limited private sector development of AVMs proceeded in a parallel fashion but was essentially rooted in the academic world. In the 1980s, Carl Case and Robert Schiller developed the Case-Schiller Index or CSI, the forerunner of the modern residential AVM, for secondary loan markets.
The AVM was based on a repeat sales approach or sales index and was generally intended for property loan portfolio reviews. It was during this timeframe that the exponential growth in server technology, personal computing power, and the Internet began to eliminate the barriers to cost effective analysis of real estate information.
Two very different US firms, TRW (now First American Real Estate Services) and HNC Software (specialists in statistical modeling and neural networks) ramped AVMs up to the next level in the mid-90s with models relying on property and neighbourhood specific attributes. Concurrently, the market signalled general acceptance of AVMs, at least for secondary markets, when the largest USA vendors of mortgage capital, Freddie Mac and Fannie Mae adopted AVMs as a quality control tool for evaluation of pools of mortgage loans. The day of AVM had arrived and there was no turning back.
During the development of AUs, limited private sector development of AVMs proceeded in a parallel fashion but was essentially rooted in the academic world. In the 1980s, Carl Case and Robert Schiller developed the Case-Schiller Index or CSI, the forerunner of the modern residential AVM, for secondary loan markets.
The AVM was based on a repeat sales approach or sales index and was generally intended for property loan portfolio reviews. It was during this timeframe that the exponential growth in server technology, personal computing power, and the Internet began to eliminate the barriers to cost effective analysis of real estate information.
Two very different US firms, TRW (now First American Real Estate Services) and HNC Software (specialists in statistical modeling and neural networks) ramped AVMs up to the next level in the mid-90s with models relying on property and neighbourhood specific attributes. Concurrently, the market signalled general acceptance of AVMs, at least for secondary markets, when the largest USA vendors of mortgage capital, Freddie Mac and Fannie Mae adopted AVMs as a quality control tool for evaluation of pools of mortgage loans. The day of AVM had arrived and there was no turning back.
Automated Mapping/Facilities Management Systems (AM/FM) differ from CAD systems in that they feature sophisticated databases capable of storing and manipulating related attribute information; however, because they were developed primarily for utilities, they best serve networking functions and are limited in their ability to analyze relationships between different layers other than through visual inspection (overlapping of layers).
Automated Mapping/Facilities Management Systems (AM/FM) differ from CAD systems in that they feature sophisticated databases capable of storing and manipulating related attribute information; however, because they were developed primarily for utilities, they best serve networking functions and are limited in their ability to analyze relationships between different layers other than through visual inspection (overlapping of layers).
Thematic Maps
GIS are flexible in displaying map information because, unlike a paper map, not all information must be visible at the same time. In a GIS, you can also change how an object is depicted depending on its attributes. This function is known as thematic mapping. Thematic maps are common in atlases, such as shading a map in different colours to distinguish various ranges of altitudes. Another thematic map could use colours to represent the number of seats held by different political parties. A GIS can build these kinds of maps automatically and interactively, allowing customized maps to better meet the user’s requirements.
Thematic maps allow visualization of trends in data by integrating data from a wide range of different sources.
Thematic maps can be quickly and easily created using GIS. As well, the maps are dynamic, in that they can be automatically updated as data values change with time. As a result, you can use this kind of mapping to monitor changing situations, such as traffic flow or property assessment values. The figure below shows the percentage increases in assessed value for a neighbourhood - the large changes stand out as the brightest colours.
Thematic Maps
GIS are flexible in displaying map information because, unlike a paper map, not all information must be visible at the same time. In a GIS, you can also change how an object is depicted depending on its attributes. This function is known as thematic mapping. Thematic maps are common in atlases, such as shading a map in different colours to distinguish various ranges of altitudes. Another thematic map could use colours to represent the number of seats held by different political parties. A GIS can build these kinds of maps automatically and interactively, allowing customized maps to better meet the user’s requirements.
Thematic maps allow visualization of trends in data by integrating data from a wide range of different sources.
Thematic maps can be quickly and easily created using GIS. As well, the maps are dynamic, in that they can be automatically updated as data values change with time. As a result, you can use this kind of mapping to monitor changing situations, such as traffic flow or property assessment values. The figure below shows the percentage increases in assessed value for a neighbourhood - the large changes stand out as the brightest colours.
The 2008 collapse of the US housing market has been scrutinized by all stakeholders and been subject to US Congressional hearings. Most of the blame for the market collapse has been attributed to high risk or sub-prime syndicated residential mortgage backed securities (RMBS).
Did AVMs play a central role in floating these loans?
Apparently not, according to 2011 testimony given to Congress by Corelogic, a major US property data information storage and analysis entity. Corelogic’s Chief Economist Brendan Keane stated that securitization of debt is a good thing provided that it is accompanied by uniformity of underwriting standards and securitized assets, standardization of securitization processes, and granular, loan-level understanding of the credit risks associated with whole loan portfolios and residential mortgage-backed securitizations (RMBS). In Keane’s opinion, the best way to evaluate RMBS portfolios is through objective automated tools, such as AVMs.
The 2008 collapse of the US housing market has been scrutinized by all stakeholders and been subject to US Congressional hearings. Most of the blame for the market collapse has been attributed to high risk or sub-prime syndicated residential mortgage backed securities (RMBS).
Did AVMs play a central role in floating these loans?
Apparently not, according to 2011 testimony given to Congress by Corelogic, a major US property data information storage and analysis entity. Corelogic’s Chief Economist Brendan Keane stated that securitization of debt is a good thing provided that it is accompanied by uniformity of underwriting standards and securitized assets, standardization of securitization processes, and granular, loan-level understanding of the credit risks associated with whole loan portfolios and residential mortgage-backed securitizations (RMBS). In Keane’s opinion, the best way to evaluate RMBS portfolios is through objective automated tools, such as AVMs.
The GIS forms a constant link between the attributes and the geographical properties of each of the features: you can get either one of these if you know something about the other. This is the basis of the many location-finding mapping services on the Internet: you can generate a map for any location because there is a data layer with a link between the postal code or zip code attribute and the geographical coordinates.
The GIS forms a constant link between the attributes and the geographical properties of each of the features: you can get either one of these if you know something about the other. This is the basis of the many location-finding mapping services on the Internet: you can generate a map for any location because there is a data layer with a link between the postal code or zip code attribute and the geographical coordinates.
Geographic Information Systems (GIS) were developed for spatial analysis needs such as planning, natural resources, and land records management. GIS can completely integrate spatial data and attribute data among different layers. The GIS approach is ideal for multipurpose users.
Of the three computerized mapping systems, GIS is the most commonly used by the real estate industry.
Geographic Information Systems (GIS) were developed for spatial analysis needs such as planning, natural resources, and land records management. GIS can completely integrate spatial data and attribute data among different layers. The GIS approach is ideal for multipurpose users.
Of the three computerized mapping systems, GIS is the most commonly used by the real estate industry.
The 2008 collapse of the US housing market has been scrutinized by all stakeholders and been subject to US Congressional hearings. Most of the blame for the market collapse has been attributed to high risk or sub-prime syndicated residential mortgage backed securities (RMBS).
Did AVMs play a central role in floating these loans?
Apparently not, according to 2011 testimony given to Congress by Corelogic, a major US property data information storage and analysis entity. Corelogic’s Chief Economist Brendan Keane stated that securitization of debt is a good thing provided that it is accompanied by uniformity of underwriting standards and securitized assets, standardization of securitization processes, and granular, loan-level understanding of the credit risks associated with whole loan portfolios and residential mortgage-backed securitizations (RMBS). In Keane’s opinion, the best way to evaluate RMBS portfolios is through objective automated tools, such as AVMs.
The 2008 collapse of the US housing market has been scrutinized by all stakeholders and been subject to US Congressional hearings. Most of the blame for the market collapse has been attributed to high risk or sub-prime syndicated residential mortgage backed securities (RMBS).
Did AVMs play a central role in floating these loans?
Apparently not, according to 2011 testimony given to Congress by Corelogic, a major US property data information storage and analysis entity. Corelogic’s Chief Economist Brendan Keane stated that securitization of debt is a good thing provided that it is accompanied by uniformity of underwriting standards and securitized assets, standardization of securitization processes, and granular, loan-level understanding of the credit risks associated with whole loan portfolios and residential mortgage-backed securitizations (RMBS). In Keane’s opinion, the best way to evaluate RMBS portfolios is through objective automated tools, such as AVMs.
Section 7.17.5 of CUSPAP 2012 provides directionon AVMs similar to USPAP. When an automated valuation model is applicable, an appraiser must:
have a basic understanding of how the AVM operates;
determine if use of the AVM is appropriate for the assignment;
ensure that the AVM does not exclude relevant data necessary for a credible result; and
when developing opinions or conclusions in an appraisal, respond to these Standards.
However, there are practical standards issues for appraisers who use or review private sector AVMs in Canada. At the present time, most AVM vendors view the algorithm that drives their products to be proprietary and are generally reluctant to share this competitive information. In addition, there are significant research and development commitments in both time and money required to create a workable AVM. Consequently, this business model presents a serious barrier to appraisers in meeting their professional standards in using or reviewing private sector AVMs.
Section 7.17.5 of CUSPAP 2012 provides directionon AVMs similar to USPAP. When an automated valuation model is applicable, an appraiser must:
have a basic understanding of how the AVM operates;
determine if use of the AVM is appropriate for the assignment;
ensure that the AVM does not exclude relevant data necessary for a credible result; and
when developing opinions or conclusions in an appraisal, respond to these Standards.
However, there are practical standards issues for appraisers who use or review private sector AVMs in Canada. At the present time, most AVM vendors view the algorithm that drives their products to be proprietary and are generally reluctant to share this competitive information. In addition, there are significant research and development commitments in both time and money required to create a workable AVM. Consequently, this business model presents a serious barrier to appraisers in meeting their professional standards in using or reviewing private sector AVMs.
Multiple Layers
The power of GIS lies in its ability to integrate and create different layers of information for a geographical area. A conventional map-maker must balance information and clarity, displaying sufficient detail to make the map useful, but not so much that it becomes cluttered and confusing.
GIS removes this problem because many different layers of information can be added and shown in different combinations and in a different order. At the click of a mouse, different data layers can be switched on and off so that many different views can be created for the same location.
Multiple Layers
The power of GIS lies in its ability to integrate and create different layers of information for a geographical area. A conventional map-maker must balance information and clarity, displaying sufficient detail to make the map useful, but not so much that it becomes cluttered and confusing.
GIS removes this problem because many different layers of information can be added and shown in different combinations and in a different order. At the click of a mouse, different data layers can be switched on and off so that many different views can be created for the same location.
Most computerized mapping systems can be categorized as: _____, ________ or ________
Most computerized mapping systems can be categorized as: computer-assisted drafting systems (CAD), automated mapping/facilities management systems (AM/FM), or geographic information systems (GIS).
This method does not rely on the detail present in a hedonic model and hence the output is more subject to variability.
AVMs based on price indices are very simple models. These models are generally based on repeat-sales to generate a price index for a specific geographic area, usually defined by zip or postal code.This method does not rely on the detail present in a hedonic model and hence the output is more subject to variability
STUDY NOTE
Computerized Mapping Systems Most computerized mapping systems can be categorized as: computer-assisted drafting systems (CAD), automated mapping/facilities management systems (AM/FM), or geographic information systems (GIS). All three require a base grid with x-y coordinates and permit the mapping of cartographic features such as points, lines, and polygons. Overlapping map layers, each containing a specific kind of information, are used in all three. All offer the ability to change scale, update maps readily, print or plot maps as needed, and display and store text (such as names, labels, dimensions, and other labeling data).
STUDY NOTE
Computerized Mapping Systems Most computerized mapping systems can be categorized as: computer-assisted drafting systems (CAD), automated mapping/facilities management systems (AM/FM), or geographic information systems (GIS). All three require a base grid with x-y coordinates and permit the mapping of cartographic features such as points, lines, and polygons. Overlapping map layers, each containing a specific kind of information, are used in all three. All offer the ability to change scale, update maps readily, print or plot maps as needed, and display and store text (such as names, labels, dimensions, and other labeling data).
The maps shown in GIS are intelligent – the features know their own identity.
The term ________ describes any piece of information about an object that can be stored in addition to its geographic properties. GIS can tell you not just the shape of a feature, but also what it is and any other information that may exist about it.
The maps shown in GIS are intelligent – the features know their own identity.
The term attribute describes any piece of information about an object that can be stored in addition to its geographic properties. GIS can tell you not just the shape of a feature, but also what it is and any other information that may exist about it.
Price Indices. AVMs based on price indices are very simple models. These models are generally based on repeat-sales to generate a price index for a specific geographic area, usually defined by zip or postal code.This method does not rely on the detail present in a hedonic model and hence the output is more subject to variability. The Zillow “zindex” is an example of a price index AVM (explained later in the lesson).
Price Indices. AVMs based on price indices are very simple models. These models are generally based on repeat-sales to generate a price index for a specific geographic area, usually defined by zip or postal code.This method does not rely on the detail present in a hedonic model and hence the output is more subject to variability. The Zillow “zindex” is an example of a price index AVM (explained later in the lesson).
How has the private sector reacted to confusion over the professional standards governing the use and interpretation of AVMs?
In 2004,Fitch Ratings,a prominent international credit rating agency recognized by the US Securities Commission, issued an alert to vendors of US residential mortgage-backed securities (RBMS), known as commercial mortgage-backed securities or CMBS in Canada, noting that Fitch would apply 10-15% discounts on lenders’value estimates based on “non-full appraisals”.The concern expressed by Fitch Rating was that there was a significant delay or lag in measuring market trends associated with the data used by AVMs.In a May 2006 news release, Fitch reversed its earlier position, using AVM research to conclude there is no significant lag. Fitch Senior Director Suzanne Mistretta stated that Fitch will “evaluate each lender’s processes and controls for its AVM and other non-full appraisal usage as a sole valuation tool for new first lien originations to ensure that overvaluation risk is adequately mitigated”. AVM evaluation is covered further in the next sections.
How has the private sector reacted to confusion over the professional standards governing the use and interpretation of AVMs?
In 2004,Fitch Ratings,a prominent international credit rating agency recognized by the US Securities Commission, issued an alert to vendors of US residential mortgage-backed securities (RBMS), known as commercial mortgage-backed securities or CMBS in Canada, noting that Fitch would apply 10-15% discounts on lenders’value estimates based on “non-full appraisals”.The concern expressed by Fitch Rating was that there was a significant delay or lag in measuring market trends associated with the data used by AVMs.In a May 2006 news release, Fitch reversed its earlier position, using AVM research to conclude there is no significant lag. Fitch Senior Director Suzanne Mistretta stated that Fitch will “evaluate each lender’s processes and controls for its AVM and other non-full appraisal usage as a sole valuation tool for new first lien originations to ensure that overvaluation risk is adequately mitigated”. AVM evaluation is covered further in the next sections.
Evaluating AVMs
Generally accepted standards and methods for measuring the performance of AVMs or ranking AVM output in relation to conventional appraisal reports are not available at this time. However, this situation is changing as lending organizations, debt rating agencies and AVM vendors demonstrate leadership in AVM evaluation.
In the previous section we learned that Fitch Ratings has put measures in place to evaluate the reliability of AVMs to predict value in certain market areas.
Evaluating AVMs
Generally accepted standards and methods for measuring the performance of AVMs or ranking AVM output in relation to conventional appraisal reports are not available at this time. However, this situation is changing as lending organizations, debt rating agencies and AVM vendors demonstrate leadership in AVM evaluation.
In the previous section we learned that Fitch Ratings has put measures in place to evaluate the reliability of AVMs to predict value in certain market areas.
An AVM is a computer software program that analyzes data using an automated process. AVMs may use _____, ______, ______, _____ and ______
An AVM is a computer software program that analyzes data using an automated process. For example, AVMs may use regression, adaptive estimation, neural networks, expert reasoning, and artificial intelligence programs.
Data stored in tables is usually very difficult to digest all at once. It is necessary to filter out irrelevant information and focus only on what is most relevant to the issue at hand. For example, imagine you are visiting an unfamiliar city. You might have a map showing the city centre and the restaurant locations. This would be more helpful than a map showing every commercial property in the city, so cluttered with information that you cannot possibly hope to find somewhere to eat. fit an
You can query the features in GIS map layers by selecting and viewing just those that satisfy particular criteria. Your query can be as simple or complicated as you like, as long as the data fields are there to interrogate.
Data stored in tables is usually very difficult to digest all at once. It is necessary to filter out irrelevant information and focus only on what is most relevant to the issue at hand. For example, imagine you are visiting an unfamiliar city. You might have a map showing the city centre and the restaurant locations. This would be more helpful than a map showing every commercial property in the city, so cluttered with information that you cannot possibly hope to find somewhere to eat. fit an
You can query the features in GIS map layers by selecting and viewing just those that satisfy particular criteria. Your query can be as simple or complicated as you like, as long as the data fields are there to interrogate.
WEAKNESS
An inherent additional weakness of AVMs is their attempt to model human reasoning. It is extremely difficult for mathematics to model the complexities of human behaviour, especially in appraisal where technical information is transformed by personal experience.Market relationships are not static and an AVM will require periodic adjustment to reflect observed market changes over time.Therefore, the risk associated with reliability of AVM outputs increases when they become the sole determinant of value for real estate decisions.
WEAKNESS
An inherent additional weakness of AVMs is their attempt to model human reasoning. It is extremely difficult for mathematics to model the complexities of human behaviour, especially in appraisal where technical information is transformed by personal experience.Market relationships are not static and an AVM will require periodic adjustment to reflect observed market changes over time.Therefore, the risk associated with reliability of AVM outputs increases when they become the sole determinant of value for real estate decisions.
AVM = Appraisal Valuation Model
Designed, developed, and applied by an appraiser
Valuation tool
AVM = Automated Valuation Model
Completely automated
Outcome for lending risk assessment
No appraiser intervention
AVM = Appraisal Valuation Model
Designed, developed, and applied by an appraiser
Valuation tool
AVM = Automated Valuation Model
Completely automated
Outcome for lending risk assessment
No appraiser intervention
Automated Mapping/Facilities Management Systems (AM/FM) differ from CAD systems in that they feature sophisticated databases capable of storing and manipulating related attribute information; however, because they were developed primarily for utilities, they best serve networking functions and are limited in their ability to analyze relationships between different layers other than through visual inspection (overlapping of layers).
Automated Mapping/Facilities Management Systems (AM/FM) differ from CAD systems in that they feature sophisticated databases capable of storing and manipulating related attribute information; however, because they were developed primarily for utilities, they best serve networking functions and are limited in their ability to analyze relationships between different layers other than through visual inspection (overlapping of layers).
It is typically preferable to use a ___________ referencing system understood by all users, in order to identify specific features clearly and without ambiguity. Using text names can fail if one set of information has a misspelled name or if there are duplicate entries.
It is typically preferable to use a numerical referencing system understood by all users, in order to identify specific features clearly and without ambiguity. Using text names can fail if one set of information has a misspelled name or if there are duplicate entries.
Another benefit of mixing and matching different layers is that by combining mapping for the same area surveyed at different times, you can identify any changes. The example below shows the changes to an area as the coast eroded over time.
Another benefit of mixing and matching different layers is that by combining mapping for the same area surveyed at different times, you can identify any changes. The example below shows the changes to an area as the coast eroded over time.
According to a variety of valuation and lending community experts (to whom we’ll refer to during the lesson), the growth of public and private sector AVMs has been driven by the following factors:
increasing competitive pressures to deliver real estate intelligence faster and cheaper;
structural changes in the banking industry (mentioned by Cassens Zillioux);
huge volumes of electronic real estate data are now readily available–clients are questioning traditional appraisal approaches that ignore most of the data and focus only on small samples;
the neutral bias inherent in most automated valuation systems (i.e., similar probability of delivering a positive or negative value outcomes) versus human bias; and
the belief by some consumers of appraisal services that removing appraisers from the valuation equation reduces human error and potential fraud.
According to a variety of valuation and lending community experts (to whom we’ll refer to during the lesson), the growth of public and private sector AVMs has been driven by the following factors:
increasing competitive pressures to deliver real estate intelligence faster and cheaper;
structural changes in the banking industry (mentioned by Cassens Zillioux);
huge volumes of electronic real estate data are now readily available–clients are questioning traditional appraisal approaches that ignore most of the data and focus only on small samples;
the neutral bias inherent in most automated valuation systems (i.e., similar probability of delivering a positive or negative value outcomes) versus human bias; and
the belief by some consumers of appraisal services that removing appraisers from the valuation equation reduces human error and potential fraud.
Neural Network.
An attempt to use computing resources to mimic or model the way the human brain works. A digital network relies on computations involving zero and one, while a neural network relies on a series of connections that are turned on and off (similar in the brain function). As input is provided to all units in the network, the organization and weights of the inputs determine the outputs.29 Due to the complexity and highly theoretical nature of these networks, they have not been widely adopted as the basis for AVMs.
Neural Network.
An attempt to use computing resources to mimic or model the way the human brain works. A digital network relies on computations involving zero and one, while a neural network relies on a series of connections that are turned on and off (similar in the brain function). As input is provided to all units in the network, the organization and weights of the inputs determine the outputs.29 Due to the complexity and highly theoretical nature of these networks, they have not been widely adopted as the basis for AVMs.
___________ maps use shading, patterns, or colours to highlight areas characterized by some general common feature,for example, political maps or agricultural crop types.
Choropleth maps use shading, patterns, or colours to highlight areas characterized by some general common feature,forexample, political maps or agricultural crop types.
Weaknesses
An automated valuation model is only as good as the data and workmanship programmed into it. The soft underbelly of AVMs, in general, is the quality, consistency and availability of data. Keep in mind that this data will typically come from multiple sources: Multiple Listing Services, government property transfer records, assessments, and, in some cases, appraised values. There is a body of evidence, mainly in the USA, which indicates serious concerns with the quality and consistency of private sector AVM output. The US lending community and debt rating agencies have begun to develop technical standards for evaluation of AVMs(covered in the next section).
Weaknesses
An automated valuation model is only as good as the data and workmanship programmed into it. The soft underbelly of AVMs, in general, is the quality, consistency and availability of data. Keep in mind that this data will typically come from multiple sources: Multiple Listing Services, government property transfer records, assessments, and, in some cases, appraised values. There is a body of evidence, mainly in the USA, which indicates serious concerns with the quality and consistency of private sector AVM output. The US lending community and debt rating agencies have begun to develop technical standards for evaluation of AVMs(covered in the next section).
GIS Components
A working GIS integrates five key components:
Hardware
Software
Data
People
Methods
GIS Components
A working GIS integrates five key components:
Hardware
Software
Data
People
Methods
Thematic maps can be quickly and easily created using GIS. As well, the maps are dynamic, in that they can be automatically updated as data values change with time. As a result, you can use this kind of mapping to monitor changing situations, such as traffic flow or property assessment values. The figure below shows the percentage increases in assessed value for a neighbourhood – the large changes stand out as the brightest colours.
Thematic maps can be quickly and easily created using GIS. As well, the maps are dynamic, in that they can be automatically updated as data values change with time. As a result, you can use this kind of mapping to monitor changing situations, such as traffic flow or property assessment values. The figure below shows the percentage increases in assessed value for a neighbourhood – the large changes stand out as the brightest colours.
_____________ maps show physical surface features,such as roads,rivers,and buildings.
Topographic maps show physical surface features,such as roads,rivers,and buildings.
GIS can go well beyond conventional maps in storing and transmitting attribute information because you are no longer restricted by map space.
Tabular information can be stored for each object in a database that operates beneath the map layers. This allows a nearly infinite array of attributes to be recorded. All GIS have simple tools for examining features. For example, clicking on an object with your mouse displays a full set of attributes without that information having to be on screen all the time. The object of interest can be identified by the visual map graphic and then the object can tell you its own attributes.
GIS can go well beyond conventional maps in storing and transmitting attribute information because you are no longer restricted by map space.
Tabular information can be stored for each object in a database that operates beneath the map layers. This allows a nearly infinite array of attributes to be recorded. All GIS have simple tools for examining features. For example, clicking on an object with your mouse displays a full set of attributes without that information having to be on screen all the time. The object of interest can be identified by the visual map graphic and then the object can tell you its own attributes.
GIS are flexible in displaying map information because, unlike a paper map, not all information must be visible at the same time. In a GIS, you can also change how an object is depicted depending on its attributes. This function is known as __________. ___________ are common in atlases, such as shading a map in different colours to distinguish various ranges of altitudes. Another thematic map could use colours to represent the number of seats held by different political parties. A GIS can build these kinds of maps automatically and interactively, allowing customized maps to better meet the user’s requirements.
GIS are flexible in displaying map information because, unlike a paper map, not all information must be visible at the same time. In a GIS, you can also change how an object is depicted depending on its attributes. This function is known as __________. ___________ are common in atlases, such as shading a map in different colours to distinguish various ranges of altitudes. Another thematic map could use colours to represent the number of seats held by different political parties. A GIS can build these kinds of maps automatically and interactively, allowing customized maps to better meet the user’s requirements.
