Texas Valuation Professionals

07/13/2026

I wanted to share an image which I'm going to use to begin the AVS Tech Talk on July 21st.

We are going to talk about models, specifically as they pertain to adjustment support. You may not think of 'model' as the term you'd most associate with sales comparison analysis techniques, but a model is just a representation of something else, often something which can't be directly observed.

Let's consider Leonardo da Vinci's 'The Vitruvian Man':
In the illustration, The Vitruvian Man represents the reality which can't be directly observed. Observation can only take place as mediated by data. Data is just the artifact that reality leaves behind.

We can't forget that we don't try to model the data, we try to model the REALITY.

Again, looking at the illustration if you didn't have the first frame to look at you might be able to overlay a model which looks like a bird or a turtle. It is possible that those model selections might even match a given set of data better than any other model, but they would still give an entirely wrong impression of reality.

Of course, we must also recognize that the best model will always reflect a somewhat distorted view of reality. I like The Vitruvian Man as something to contemplate for this. The Vitruvian Man given an impression of a man who can and does MOVE. The reality that appraisers deal with, like da Vinci's artwork, is constantly in motion. The data too is always shifting...

I hope this teaser of the upcoming discussion has piqued your curiosity. If so, join us!

The American Valuation Society has been putting on these Tech Talks for free, so follow the link if you'd like to register.

https://us06web.zoom.us/webinar/register/2917824897191/WN_a3IEpgjWT2ukVEk5MDZTrA #/registration

05/08/2026

With the addition of discrete weighting labels (most, less, or no weight) in UAD 3.6, I think we need to step back and look at what it means to reconcile ADJUSTED sales prices.

I think that the default setting for appraisers, users of appraisals, and the makers of appraisal policy has been to confuse the recognition of the UNADJUSTED similarity of a sale with how to treat the ADJUSTED price of that sale in the reconciliation.

The unadjusted and adjusted prices reflect two fundamentally different bundles of property attributes. The unadjusted bundle is that represented by the comparable sale, and the adjusted bundle is that represented by the subject. That is hugely important to recognize before moving into reconciliation.

In short, the adjusted sales prices are no longer supposed to encode dissimilarity. The whole point of quantitative analysis is to remove the price impact of those dissimilarities before reconciliation.

So, the question becomes: How should we reconcile? That depends largely upon the definition of market value.

If the definition of market value includes the word "probable", then you must explicitly deal with probability within the appraisal. There is no better place to do that than the reconciliation.

This is a brief discussion of the role of sales comparison reconciliation. This video challenges the conventional narrative around reconciliation.

04/27/2026

Epistemic Closure and the Dunning-Kruger Effect

I've written about the Dunning-Kruger effect before, but I've noticed something which I'm actually hesitant to point out...epistemic closure.

Dunning-Kruger called the first peak of overconfidence "Mount Stupid". Ouch...I've been there and have the T-shirt.

I'm calling the second peak "Epistemic Closure". This phenomenon describes the blindness to knowledge which you don't already possess. What I'm referring to is not knowledge in general, but rather to a depth of knowledge in a particular area. This is similar to the concept of the Overton Window, where one is blind to knowledge outside of ones window of perception regarding what is possible.

The person at the peak of Mount Stupid confidently declares "I'm GOOD at this!"
..and later hopes that nobody was around to hear it.

The person at the peak of Epistemic Closure confidently declares "I'm an EXPERT at this!"
..and then posts it on social media.

Of course I'm hesitant to point this out, because I'm still trying to get this log out of my own eye. The stumble off of the mountain of Epistemic Closure can be a painful one. I've been there more times than I care to admit and have the bruises to prove it.

I suspect that the peak of Epistemic Closure is a recurring problem for all of us. There will always be the temptation to believe that I have arrived, only to find myself at another false summit.

Of course, this concept has application well beyond valuation, but for those in an industry where you are paid for your opinion, the temptation is real.

May we all learn to treat the path toward toward expertise as a perpetual journey and not a peak upon which to plant our flag. To do that we must only allow confidence to increase in direct proportion to our humility.

04/20/2026

Since I wrote this article I heard a quote which I've been thinking about a lot. I think it speaks to much of what I was trying to explain in the article.

“The poet's eye, in a fine frenzy rolling,
Doth glance from heaven to earth, from earth to heaven;
And as imagination bodies forth
The forms of things unknown, the poet's pen
Turns them to shapes and gives to airy nothing
A local habitation and a name.”

This line from Shakespeare's "A Midsummer Night's Dream" speaks to something which I've been trying to articulate for some time. According to Shakespeare, the poetic eye is what can bring shape to that which can be apprehended, but never fully comprehended.

Valuation analysts likewise must build models based on what has been apprehended (perceived), but can never build a model which will contain comprehension (understanding). In that way appraisers are like poets. Real estate data is messy and complex, and the human behavior encoded within that data is also messy and complex, but often in different ways. The appraiser must apprehend markets which can never be fully comprehended. The appraiser must then turn them "to shapes" and give to the "airy nothing" of human behavior "a local habitation and a name". That local habitation and name is market value.

So, our models (whether an entire approach to value or a sub-problem within an approach such as adjustment support) must be built as 'perception-containers' which yield insights, not answer generators which yield conclusions.

We cannot ask our models to build themselves from messy and complex data. Mathematical models behave like gases; they expand to the shape of the container in which they are placed. The valuation analyst must first perceive and only then build a container for the math to fill.

What does that mean in practice?
➡️ You must choose the method which fits your perception of the market, not just develop your perception of the market from the results of a method.
➡️ If you don't know how to guide it, AI will select a method for you, and it won't be based on your perception of the market either.

We can't outsource our "poet's eye" or our models will be meaningless.
We can't outsource our "poet's pen" or our conclusions will be misleading.

Artificial Intelligence (AI) will never be your most powerful tool for real estate appraisal.   With all of the rapid development of AI, you may think that assertion is bold. Maybe you have just begun experimenting with it and are amazed. Maybe you are well beyond experimentation and have

04/16/2026

🎼 Market Value is a symphony. 🎻

Particularly when explaining something which is new or unknown to the listener, an analogy/metaphor can be very helpful. Analogies make the connection between the known and the unknown. Metaphors transform something intangible into something concrete.

I've been producing a series for quite some time now which attempts to introduce a new method in the valuation process. I've been dissecting the sales comparison approach; asking mathematical, statistical, and theoretical questions which are important to truly understanding market value.

I think an analogy and metaphor is far overdue.

To that end, in this video I step back from the dissection table and turn our attention from the science and mathematics of data analysis to a musical metaphor.

03/07/2026

How does the concept of intrinsic value impact solar? Listen to this brief explanation…

03/06/2026

Holistic Adjustment Technique Module 4 - Interdeterminacy

I've introduced this term before, but this video goes more in depth about this concept and why it is critical in both the theory and practice of modeling real estate markets in a sales comparison approach.

Respecting the organic and structural interplay between variables (i.e., adjustment factors) was essential in the development of the method I'm endeavoring to bring to the appraisal community.
https://youtu.be/aKwG618g01k

This module defines the term interdeterminacy and why it is helpful in better understanding how to model a real estate market effectively.

03/02/2026

DFW Market Update - First Quarter 2026

After looking at local February data, I just updated the "Market Trends at a Glance" section of my website. I thought that I'd share my summary for those interested in the Dallas/Fort Worth residential real estate market.

"While the first quarter of 2026 is in many ways following seasonal norms, the overall market so far has been weaker than previous years. Relative to the same time last year, sales activity is muted with fewer closed sales, homes taking longer to sell, and supply still elevated throughout much of the Dallas/Fort Worth metroplex. Elevated supply is most pronounced in areas where new construction has continued to add to the housing stock.

Interest rates declined substantially in 2025 and pricing also declined in most market segments. The question remains whether those conditions will be sufficient to recover demand. Early indications are that buyer activity may be increasing. The number of showings per listing in February 2026 was higher than the same month in 2025. This may indicate that price and interest rate reductions may result in a stronger spring market. They may be more cautious than in previous years, but there ARE buyers out there. How many of these 'potential' buyers become 'actual' buyers is something which remains to be seen."

02/27/2026

Holistic Adjustment Technique Module 3 - The Problem of Pleasure

This is Module 3 in my discussion which is laying the foundation for my new appraisal method which I'm calling the Holistic Adjustment Technique (Patent Pending). Essentially, before I can describe the method we have to accurately frame the valuation problem. In Module 1, I asserted that it is not possible to support an adjustment in isolation. In Module 2, I discussed determinism in 2 ways and showed how a deterministic framework may not be helpful in describing a market.

In this module we talk about how the Sales Comparison Approach is a hedonic valuation model. 'Hedonic' derives from the Greek word for 'pleasure'. If we are trying to measure and isolate pleasure, we will encounter some problems. Those problems have to be addressed for the model (Sales Comparison Approach) to be employed effectively.

Continuing in the ongoing discussion of my new valuation method which I call HAT (Holistic Adjustment Technique), I talk about reframing the sales comparison...

02/16/2026

Holistic Adjustment Technique Module 2 - Determined vs. Determined

I have to give credit to Louis J. Pitoni, SRA for this video. He asked a great question about the first video in my Holistic Adjustment Technique series, which prompted what I hope will be a helpful addition to the discussion.

In a nutshell - Determined vs. Determined - what do I mean?

This video gives a demonstration that shows that this question isn't just merely semantics. Understanding the two definitions and their implications is critically important in the building blocks of a truly reliable sales comparison approach.

https://youtu.be/DBtB4KsX9Sw

Determine vs Determined - This is the second video in the series to explain the theory and practice of the Holistic Adjustment Technique. This one answers a...