What happens when valuation becomes dramatically easier to produce?
Jevons Paradox from 1865, says when technology makes something cheaper or easier, people don’t use less of it. They use more. A LOT MORE.
Computers got cheaper, so we put one on every desk and eventually in every pocket. Email didn’t reduce communication. It multiplied it.
AI will likely follow the same path. Efficiency doesn’t shrink demand. It explodes it.
As commercial appraisals become faster to produce, banks will still care about collateral risk. Investors will still keep buying properties. Regulators will still have oversight. But they’ll ask more questions.
Uber is illustrative. Uber hurt many taxi drivers. But it also made transportation so convenient that people took substantially more (net new) rides. The pie got much bigger, even as the slices changed.
Before Uber: unpredictable pricing, cash only, good luck finding a cab at 11pm in the rain. After Uber: on-demand, transparent pricing, a car shows up in four minutes.
AI may do the same for commercial valuation. Higher expectations delivered with a frictionless experience.
But if a bank can analyze collateral quicker, they will ask more questions. They’ll lean into risk, helping answer, “if this loan goes bad, how much risk am I actually taking?” That’s a different perspective than an appraisal written solely to satisfy USPAP.
Will fees change? Possibly. Who knows. But if AI dramatically increases supply, fees could come under pressure. If it accelerates retirements and shrinks the profession faster than demand falls, fees could stabilize or even rise.
Technology rarely eliminates valuable work. It changes what clients value. The biggest opportunity is those appraisers that help their clients make better decisions.
Don’t be a “taxi driver” appraiser in an old Crown Vic.
Nobody wants that.