Automated home value estimates quench buyer’s thirst for quick information. But the same systems may be hurting the process. Clifford Rossi, a professor at the Robert H. Smith School of Business at the University of Maryland, believes AVMs can magnify price volatility in housing markets and hurt home sales. Per the American Banker:
Lying behind online home value estimators are a host of complicated statistical models that attempt to predict a home's price based on comparisons with similar properties (comparable sales) using county property record data on a variety of attributes such as house square footage, number of bedrooms and bathrooms, among a number of features unique to that property. Aggregating and updating property record data from thousands of offices around the country has improved over the years. However, significant data lags of six months or more still exist in many areas depending on the record office's capabilities to update this information.