HouseCanary CEO Jeremy Sicklick insisted that the rise of automated valuation models, or AVMs, is akin to a hidden iceberg, saying during an Inman Connect panel Tuesday that the real estate industry wouldn’t see it until it was too late — a comment that prompted a brief, heated rejoinder from a fellow panelist.
Sicklick predicted that more than half of all properties and transactions eventually would be evaluated through automation, but he acknowledged that widely differentiated properties are yet impervious to models designed by his own company or Zillow’s Zestimate. Nonetheless, his comments in Las Vegas struck a chord.
“Our view is probably about 70 percent of properties and transactions will be evaluated in an automated way,” Sicklick said during Inman Connect Las Vegas‘ CEO Connect panel discussion titled, “A Home Valuation Standard – Bot v. Human.” He added that HouseCanary’s model has a 2.5 percent error ratio.
In a back-and-forth, Douglas Elliman President Scott Durkin dismissed Sicklick, telling attendees such valuation models belong “in the back of the house, and not the forefront.”
The markets in which his company operates — like New York City, where little uniformity exists — don’t often emphasize AVMs.
“Data is data. It’s just what we do with it,” Durkin said. “It has no personality. It has no heart. It has no blood. Just don’t let it take over your business and don’t let it paralyze you.”
Durkin, however, took his argument one step further and went after tech companies that make money off data that agents generate.
“At the end of the day, we’ve created the data, we sold the property, we created the photographs, we created the floor plan,” Durkin said. “Everything we created, we’ve given away for free and now you’re getting a piece of it.
“You want a piece of our commission, I get it: That’s capitalism,” Durkin added. “At the end of the day, we created it all and everyone out there is trying to get a piece of it.”
Durkin even slammed HouseCanary for having a broker license, which he claimed was because they “want a piece of our commission.”
Debra Beagle, CEO and co-owner/managing broker of RE/MAX Advantage in Tennessee, landed on a middle ground, acknowledging that AVMs aren’t a magical formula in her home market of Nashville because of the idiosyncrasies of each home — but they certainly have their place.
In Tennessee, it takes 2,000 hours as an apprentice before you can become an appraiser, Beagle noted. In the past three weeks, they’ve heard from lenders that closings are being delayed by 15-20 days because appraisers are in short supply.
“I think it can be a partnership with the AI side, and the industry has to find ways,” Beagle said, adding that the industry needs to pivot and improve the customer experience.