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I would like to welcome you to “Focus on Analytics.” This column will be published in Valuation Review each month, and over the next several months I will be addressing topics of significance to appraisers who are interested in adopting or expanding their use of analytics in order to develop more accurate value conclusions more efficiently.

First, allow me to introduce myself: I am Mark Stockton, managing partner of Valuation Research LLC. I have been developing analytics for real estate appraisers for more than three decades. My background as an appraiser, a real estate broker, and a bank president and director affords me a unique perspective into the business of property valuation. 

Let’s begin by taking a look at automated valuation models (AVMs), since they are often credited with (or excoriated for) initiating the march toward analytics in property valuation.

A U.S. bankruptcy court rejected the cost approach an appraiser employed in valuing a property involved in a bankruptcy court case, determining the debtors’ appraiser offered the most accurate valuation. The debtors had brought adversary proceeding to determine the nature and extent of the junior mortgagee’s lien on their residence, for purposes of deciding whether the lien was subject to “strip off.” Read on for the court’s reasoning.

CoreLogic, a residential property information, analytics and services provider, released its May CoreLogic Home Price Index (HPI) report, which showed a huge jump in home prices year over year. The early look at data from June shows an even larger increase year over year as well, not to mention that this is the 15th consecutive monthly increase in national home prices.

From paper to paperless; from floppy discs to cloud storage — the developments in appraisal technology are staggering. So what does the future hold for mobile applications? And if you are going to get started in this area, where do you start? Check out this excerpt from our 2013 Appraisal Technology Report for a couple quick ideas.

First American Professional Real Estate Services Inc., a provider of real estate transaction-based products and services through its Evaluations group, announced the release of the Indexed Value Report, an automated valuation model (AVM) for commercial properties.

TSI Appraisal, a division of Title Source Inc., an independent provider of title insurance, property valuations and settlement services, announced that it will hold two continuing education training sessions for certified residential appraisers in the Boston area.

A total of 255 metropolitan areas across 49 states and the District of Columbia qualified to be listed on the National Association of Home Builders/First American Improving Markets Index (IMI) for July. This is down slightly from the 263 metros that made the list in June, but is more than triple the number of metros that were on it in July 2012.

The May Mortgage Monitor report released by Lender Processing Services found that the national delinquency rate continued to fall in May, marking the largest year-to-date drop since 2002. Delinquencies are down more than 15 percent since the end of December 2012, coming in at 6.08 percent for the month. As LPS Applied Analytics Senior Vice President Herb Blecher explained, much of this improvement is supported by the fact that new problem loan rates are approaching the pre-crisis average.

CoreLogic released its May CoreLogic Home Price Index (HPI) report. Home prices nationwide, including distressed sales, increased 12.2 percent on a year-over-year basis in May 2013 compared to May 2012. This change represents the biggest year-over-year increase since February 2006 and the 15th consecutive monthly increase in home prices nationally. On a month-over-month basis, including distressed sales, home prices increased by 2.6 percent in May 2013 compared to April 2013*.

Excluding distressed sales, home prices increased on a year-over-year basis by 11.6 percent in May 2013 compared to May 2012. On a month-over-month basis, excluding distressed sales, home prices increased 2.3 percent in May 2013 compared to April 2013. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic Pending HPI indicates that June 2013 home prices, including distressed sales, are expected to rise by 13.2 percent on a year-over-year basis from June 2012 and rise by 2.9 percent on a month-over-month basis from May 2013. Excluding distressed sales, June 2013 home prices are poised to rise 12 percent year over year from June 2012 and by 2 percent month over month from May 2013. The CoreLogic Pending HPI is a proprietary and exclusive metric that provides the most current indication of trends in home prices. It is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

CoreLogic, a residential property information, analytics and services provider, announced that the company has entered into a definitive agreement to acquire Marshall & Swift/Boeckh, DataQuick Information Systems and the credit and flood services operations of DataQuick Lender Solutions from the Decision Insight Information Group (DIIG). The transaction is expected to close during the third quarter of 2013 and is subject to customary closing conditions and regulatory clearance. The purchase price of the transaction is $661 million.

Founded in 1930, Marshall & Swift/Boeckh (MSB) is a provider of building cost information, residential and commercial analytics solutions and business management services for property insurance companies, financial services organizations and the public sector. Using proprietary data, algorithms and platforms that leverage best-in-class replacement and repair cost estimates, analytics and other services, MSB assists insurers in analyzing risk, underwriting property insurance coverage and estimating, managing and analyzing claims.

DataQuick Information Systems is a supplier of real estate data, analytics and business solutions to mortgage originators and servicers, investors, real estate professionals and the public sector. Employing a database of over 120 million U.S. residential properties, DataQuick provides customized analytical solutions, credit reporting, flood zone determination services, fraud monitoring, property valuation and automated decision software.

Mortgage Network Inc., one of the largest independent mortgage lenders, has opened a branch office in Charlotte,N.C. Like other Mortgage Network branch offices, the Charlotte branch will focus on helping borrowers in the regional area with their home financing needs and offers a full range of mortgage products, including conventional, non-conventional, government and reverse residential mortgage loans. This is Mortgage Network’s fifth branch office opened in 2013. 

Platinum Data Solutions, provider of collateral valuation and risk assessment technologies, and InHouse Inc., a provider of innovative appraisal management technology for banks, lenders, credit unions and other mortgage originators, have partnered to integrate Platinum Data Solutions’ RealView appraisal quality verification technology with InHouse’s Connexions appraisal management platform. RealView is known to be one of the industry’s most nimble, configurable technology for verifying appraisal quality. Connexions is acknowledged as the industry’s most advanced platform  enabling users to self-manage appraisal operations and designating any combination of individual appraisers, appraisal companies or appraisal management companies (AMCs). By integrating the two technologies, the companies are providing users with a fully customizable solution, allowing them to manage the appraisal process and verify appraisal quality and compliance in a way that precisely fits their unique business objectives. 

Veros’ future home price index (HPI) forecast continues to show significant strengthening and improvement across the nation, particularly in the west, including Texas. The HPI indicates that, on average for the top 100 metro areas, Veros expects 3.1 percent appreciation over the next 12 months. This is the fourth consecutive quarter where the index has shown forecast appreciation. In a dramatic improvement, most areas of the country are now expecting to see appreciation with far fewer areas showing price declines. As of this forecast update, nearly 90 percent of U.S. markets are expected to see appreciation, while the remaining markets (approximately 10 percent) are expected to experience declining home prices. This is a highly positive national trend given last quarter’s split at 75 percent of markets appreciating and 25 percent of markets depreciating.