I love talking about the future. I think it is because I am vitally interested in our profession and the direction it is going.  I gave a presentation a while back to a group of regulators, and one of the members of the Appraisal Subcommittee came up to me later and told me that people were calling me the Ghost of Appraisal Future.  While it sounded cool at the time, I’ve wondered since then if my message is always one that people want to hear.  I tend to call it like it is.

Let me share a great email I got this morning from a bright MAI:

Mark,

Your book “Visual Valuation” just arrived.  Thank you for writing it. Its contents have opened my eyes and served as a paradigm shift.

I start plumber’s school next Monday.

I guess my message can influence people in unexpected ways.

One thing I am often asked about is the future and my opinion on the next “big thing”.    What will the profession look like and how do you anticipate change.  That is not an easy answer.  You need to anticipate where innovation will come from as we head into the future, and specifically determine what forces impact our profession.

Extrapolation is hard for any profession.  For appraisers, it’s especially difficult since government regulation is the great unknown. We are, as appraisers, creatures of regulation.  Whether it’s the change in the de minimus, appraiser licensing, HVCC or in financial regulation overhaul.

The impact of regulation cannot easily be factored into an understanding of how the profession would progress forward if it were merely a matter of advancement.  The regulatory impact distorts the picture of our future.  It is an imperfect mirror by any means-made more complex by the convex nature of the interaction of regulation, economics, and technology.

There is also the law of unintended consequences to account for.  Who would have thought that the efforts of an obscure bureaucrat in New York could have redefined the appraisal profession and created a business model that has more in common with fabric weavers in the 17th century that the vibrant business models of the 21st?  The throwback to a pre-industrial revolution model of working from your home and weaving fabric, ah creating appraisals in your basement, would seem ludicrous.  The very concept of appraisal as a cottage industry is hard to explain and understand.  But it’s uncomfortably real.

Given the unexpected turns in the industry, I try to look at trends.  I try to figure out what technology, what practices, what shifts in the economy are likely to have an impact on what it is we do.  I extrapolate and assume that if there is a good idea, and it makes sense in another field-could it possibly end up impacting real estate and real estate valuation?

Let me float a couple of thoughts:

Innovation does NOT come from the mainstream.
Innovation does NOT come from the establishment.
Innovation rarely comes from the “middle” of the profession.

Rather, it comes from the edges.  It comes from the intersection of different technologies.  It comes from ideas that grow in one sector and can be easily adapted, adopted and implanted into other sectors.  It comes when adjacent technology permeates the membrane, the exterior shell that keeps the status quo in power.

The impetus towards a steady-state is an imperative of the profession.  Change is not only hard to imagine-it is hard to implement.

Where are the best places to find the innovation of the near future?  I have always thought that looking   at related technology conferences is one great place.

Another trick that I sometimes use is to look at books, presentations, and ideas about the future of technology and try to extend their application into our realm and expertise.

That’s how I first came up with and used the term “The Valuescape”.  I was sitting in a conference in London, listening to a speaker from BP (yes, that BP) talk about the landscape of exploration.  I started thinking about the word “landscape”.  That lead me to think about the “landscape of valuation” and ultimately to the term “Valuescape”.  I imagined all of the property data in the country aggregated in one place.  Data made geographically aware.  Data that could then be evaluated, mined, refined and used by everyone.  I got so excited, I grabbed the domain.  Then I wrote an article about it.  Finally a chapter for the new book “Visual Valuation” published by the Appraisal Institute.

All by being at a conference about technology and thinking outside the box.

How would you start your own journey outside the box?  I would suggest following the path of my good friend John Cirincione.  John, who now works for JVI, has long been the energizer bunny of our profession, with an insatiable interest in everything that he thinks could make the appraisal profession better.  John has a true and sincere interest in making our profession a better place, and using technology to help drive change.

John introduced me to data standards and MISMO.  He introduced me to interesting international partners that lead to multiple trips to Ireland.  He helped me organize KW401, a conference that focused on innovation in our profession and lead to multiple friendships with some of the nation’s pre-eminent thought leaders.

But the most important thing he taught me was that you need to be open to looking at things that don’t immediately “manifest” themselves and make themselves obvious as innovation.  He pushed me outside of the box further than I had previously ventured.

I remember talking to him once and hearing about geographic information and how it related to locational intelligence.  I started looking at conferences on GIS/location intelligence and the like.  I started learning how this type of technology was entering other fields.  I attended a number of conferences and saw a startling view of the future. I started to understand that there was applicability to real estate in many of these conferences.  By the way-in almost every case I was the only appraiser in the room.

One thing I’ve noticed as I’ve wondered and wandered around the sidewalk to the future is that innovation is rarely the result of deliberate action.  It most frequently comes as the byproduct of looking for something else.  Sometimes we delude ourselves into thinking that change in itself is innovation, when in reality its only something…..different.  I’ve noticed that with large companies in valuation space.  Sometimes large technology or AMC or AVM players re-mix the data ingredients that they have at their disposal and voila-a new product is born.  They pat themselves on the back-its innovation!   Hardly.  As one leading executive once told after too many drinks, “you would be surprised at the kind of junk I’ve built for clients out of old pieces of data-that they thought was great and I knew was crap”.  Harsh…but true.

In order for you to know the future, you have to venture outside of your comfort zone and explore books, conferences, classes that lead you to the future.  Or at the very least, lead you in a direction that you otherwise would not have gone.  If you just go with your peers-you’ll only learn about the present.  Now that in itself is not a bad thing, because I continue to be astonished about how little most appraisers know about what is happening in their profession.  No, to really know what is going on, you need to venture off to the edges of the profession, to where appraisal overlaps with other enabling technology.  Learn what they are doing and apply it to what we could do.  It’s worked for me for more than a decade.  It’s helped me imagine what we could be as a profession, if we make some of the right choices and decisions.

Bottom line? Next week, I am heading to the 76th International Conference on Assessment Administration in Orlando-the annual IAAO conference.  It’s the pre-eminent conference on valuation innovation, technology, modeling, GIS and mass appraisal. I am going to learn, to connect and to imagine.  I am also going as a poster child for the intersection of assessment technology and private sector needs.  I can honestly say that the beginning of my journey started with the assessment community.  I owe a lot to the assessment profession and many in that profession who pioneered the use of technology and technique to solve the problem of valuing large numbers of properties with limited resources.  Early in my career, I learned to use dozens and hundreds of sales-not just 3-5.  I understood that market analysis could be far richer and deeper than fee appraisers with limited data sets could realize.  I would go to earlier conferences of the IAAO and learn about new software, new processes, new ways at integrating data and aerial imagery.  In most cases, once again, I was the only fee appraiser in the room.

I have talked for more than a decade about the “membrane” or veil that separates the fee side from the public sector in valuation. That veil that has historically kept the two halves of the profession apart.

Take my advice.  There is still time to attend the IAAO conference itself. Pierce that veil and make it one of your first forays into an adjacent technology and perspective on valuation.  I have always gained a great perspective personally on some of the technologies on the horizon.  More and more, I see topics that have applicability to both of our worlds.

Take a chance and think outside the box.  You’ll never look back.