Geospatial Analytics-Enhanced AVMs Now Critical to Fast, Accurate Real Estate Valuation

Modern AVMs powered by AI-based geospatial analytics are now critical to accurately assessing residential real estate valuation at a pivotal moment for the sector. 

A year ago, the FHFA’s decision to permanently allow automated valuation models and other desktop appraisals drawn from public records and digital property intelligence for mortgage loans was met with cheers

But today, surging interest rates and rising volatility are turning the lifeline AVMs provided during the pandemic into something more—something indispensable—amid what some call a significant real estate “reset.”

But that’s only if you use the right AVMs. The key ingredient: next-gen geospatial analytics capabilities that increase the accuracy and speed of the valuation process for more profitable decision-making. Let’s take a deeper look at what this means.

Enter: A Thoroughly Modern AVM 

Today, investors, traders, lenders, and others need to quickly and accurately assess property condition to get a firm read on valuation and rehab costs while avoiding bad bets altogether. 

Yet as widely adopted as they’ve become, most AVMs miss critical property features that impact value. And most rely on data that can be out of date by up to a year or more. As a result, they provide little or no insight into current property conditions—and could be more liability than asset as the sector’s dynamics continue to shift.  

Modern AVMs like ValPro+, however, are enhanced with CAPE’s new AIRE Property Intelligence Platform to provide accurate, up-to-date risk and valuation data for any of 110 million different properties across the US. 

Powered by AI, the AIRE platform leverages high-resolution aerial imagery, computer vision, and a wide array of novel data sources to deliver instant, inspection-quality intelligence on not just the condition of an individual property, but also its surroundings. 

Think roof construction and condition, the presence of solar panels, whether there are overhanging trees, the overall size of the property, and whether the property has a pool, yard debris, and more. It also includes the condition of neighboring properties, distance to noisy roads, train tracks, or sources of pollution—and any other characteristic impacting value. 

In real-world implementations, ValPro+ has been shown to deliver a 7.7% improvement on PPE-10 predictions for on-market valuations. 

Unbeatable Intel is in the AIRE

Existing methods like human-driven broker-price opinions (BPOs) miss 70% of property issues identified by AIRE. And the objective, structured data provided by AIRE is refreshed far more frequently than other sources of property information available today. Plus, it’s all available on-demand via auto-generated report or API. 

SFR investors, portfolio managers, HELOC originators and investors, non-agency investors, and loan traders can all take advantage of insights provided by AIRE, which extend to factors impacting property marketability, insurability, and more.  

The bottom line: Winging it on instinct or limited intel may not be the best strategy moving forward. Organizations seeking to succeed in an ultra-competitive real estate market will need all the help they can get.  

 

To learn how the CAPE AIRE AI-powered real estate intelligence platform can help organizations in every sector of the real estate ecosystem make faster, smarter business decisions, schedule a consultation today.