Introduction
Automated Valuation Models (AVMs) have transformed how industries evaluate real estate, moving from early estimations based on limited data to today’s highly refined, algorithm-driven tools, offering fast, scalable and statistically grounded insights into property values. With rapid advances in data science, machine learning and spatial analytics, AVMs now support a wide array of use cases—spanning mortgage lending, property marketing and operations, marketing, insurance, government planning and beyond.
This whitepaper explores the evolution of AVMs, their applications across sectors and how the First American Data & Analytics Procision™ AVM Suite empowers users with precise, scalable and purpose-built valuation tools.
A Brief History of AVMs
The concept of using data and statistical models to estimate property values dates back several decades, but the term Automated Valuation Model (AVM) first gained prominence in the late 1980s / early 1990s. Early AVMs were relatively simple regression-based models that pulled from tax assessor data, recent property sales and basic property characteristics to generate rough estimates of value. These tools were largely used internally by appraisal firms, investment groups and government entities to support mass valuation needs—such as tax assessment or property portfolio review.
As digital recordkeeping expanded in the late 1990s and early 2000s, so did the potential for AVMs. The rise of online Multiple Listing Services (MLS), more widespread public record access and advances in geospatial data collection allowed for richer and more timely inputs. AVMs began to integrate not just sales prices, but also neighborhood-level trends, local economic indicators and detailed property features. Financial institutions began using AVMs to support lower-risk mortgage decisions, especially for refinancing and home equity products.
In the aftermath of the 2008 housing crisis, the role of AVMs expanded even further. As regulatory scrutiny increased and risk management became more data-driven, institutions demanded tools that could support transparency, traceability and compliance. AVMs evolved to include confidence scores, model explainability and layered validation approaches that could meet both investor and regulator expectations.
Enter machine learning and artificial intelligence, and the AVM landscape began to change drastically. Models could now identify nonlinear relationships between property features and value, detect market shifts more dynamically and adapt regionally to local valuation behaviors. AVMs were no longer just fast—they were becoming increasingly sophisticated and precise.
Today, AVMs have become a foundational element in industries ranging from mortgage lending and real estate to insurance, marketing and municipal government. They are used to identify high-value prospects, assess disaster risk exposure and support evidence-based policymaking. With high-resolution spatial data, real-time updates and API integration capabilities, modern AVMs are not only faster and more accurate—they are also deeply customizable and use-case specific.
AVMs in Action: Cross-Industry Applications
Fast forward to today and AVMs are no longer confined to traditional lending environments. As the underlying data and technology have advanced, so has the versatility of these tools. Today, AVMs play a critical role in a range of industries—each leveraging the models’ speed, accuracy and adaptability for different objectives. From accelerating mortgage originations to informing public policy, here’s how AVMs are shaping business decisions across the real estate ecosystem and beyond.
Mortgage Lending & Home Equity
In mortgage lending, AVMs are widely used to support property valuation during origination, particularly in situations where a full appraisal may not be required—such as home equity loans, refinances and lower-risk transactions. With AVMs, lenders can determine a property’s estimated market value in seconds, enabling faster loan decisions and improved borrower experiences.
For home equity lending, AVMs are also used earlier in the sales funnel. By evaluating borrower-owned properties against current market data, lenders can pre-screen applicants based on estimated available equity. This allows financial institutions to focus marketing resources on the most qualified prospects—improving response rates, approval odds and overall ROI.
Additionally, AVMs are essential in portfolio risk monitoring, helping servicers track changes in collateral value and identify at-risk loans during market fluctuations.
Real Estate Sales & Prospecting
Real estate professionals rely on AVMs to stay competitive in a fast-moving market. Accurate property valuations help agents set realistic listing prices, provide sellers with confidence and inform buyer strategy. For listing portals, lead generators and property investment platforms, AVMs allow for the rapid assessment of hundreds or thousands of properties at scale.
AVMs also play a crucial role in identifying high-potential seller leads. By tracking property appreciation and loan data, brokers and platforms can identify homeowners likely to have significant equity—making them more likely to transact. Integrating AVMs into prospecting workflows means that real estate professionals can prioritize outreach and tailor messaging based on current, property-specific value data.
First American clients using AVM data have observed significant improvement in lead quality and conversion by using Procision to target homeowners based on equity and appreciation metrics.
Marketing & Customer Targeting
AVMs are transforming how marketers across industries identify, target and convert customers by providing a more complete picture of a household’s financial position and property characteristics. Marketers use property value data to enrich consumer profiles, segment audiences by home equity or appreciation trends, and trigger communications based on market shifts.
For instance, a lender might launch a campaign aimed specifically at homeowners with more than 40% equity, using AVMs to populate that audience list with precision. Similarly, a credit union may use AVM insights to pre-qualify members for home equity lines of credit (HELOCs) and invite them to apply via personalized messaging.
National retailers selling large-scale home improvement products like solar panels, HVAC systems, generators and big-box appliances are using AVMs to identify households that are more likely to invest in home upgrades.
AVMs help pool contractors and luxury outdoor living brands target homes above a certain value that also have the necessary lot size or property type. These businesses can create highly localized campaigns aimed at owners of mid- to high-value single-family homes who are more likely to finance large outdoor installations or enhancements.
Another example would be Accessory Dwelling Unit (ADU) builders who use AVM data to identify properties with enough land, equity and zoning potential to support construction projects. By targeting homeowners whose properties exceed a specific value threshold—and who likely have untapped equity—ADU providers can zero in on the most viable leads for conversion.
Using AVMs at the top of the funnel allows marketing teams to identify “ideal customers” or “likely movers” based on objective property data, reducing wasted ad spend and increasing return on investment. Homeownership duration, equity levels, neighborhood appreciation and property types all become variables in a highly targeted campaign strategy.
Government Agencies & Municipal Planning
AVMs are increasingly used by local governments, housing authorities and planning departments to support urban development and fiscal decision-making. Municipalities can use AVMs to monitor property appreciation trends across neighborhoods, analyze housing affordability and inform tax assessments.
When combined with GIS-based spatial data—like that offered by First American Data & Analytics—agencies can go even further. Planners can evaluate how proximity to infrastructure, amenities or environmental risk factors impacts residential values. For example, First American Data & Analytics’ nationwide spatial dataset allows appraisers, developers and civic agencies to measure the influence of features like parks, rail lines and power lines on property prices.
This kind of analysis supports zoning decisions, public investment planning, disaster preparedness and affordable housing policy.
Insurance & Risk Management
Insurance carriers depend on AVMs to quickly estimate replacement costs, validate property coverage and price policies more accurately. An up-to-date understanding of property value—especially in rapidly appreciating markets—ensures policyholders are properly insured and that carriers manage exposure appropriately.
AVMs also contribute to risk scoring models when paired with hazard data such as wildfire zones, floodplains or seismic activity. With these inputs, insurers can more accurately price premiums and predict loss potential across regions.
Additionally, in the event of a catastrophe, AVMs can provide rapid, scalable property revaluation, helping insurers assess claims, allocate resources and project portfolio impact in real time.
Capital Markets & Asset Management
Institutional investors, mortgage servicers and asset managers use AVMs to track changes in portfolio value, evaluate real estate-backed securities and support due diligence during whole loan and mortgage servicing rights acquisitions. The ability to update property valuations regularly and efficiently across large datasets is crucial for firms managing thousands—or millions—of assets.
For securitized products or non-performing loan sales, AVMs help buyers and sellers establish baseline property values without waiting for full appraisals, improving deal speed and pricing accuracy.
Procision™ AVM Suite: Built for Precision and Purpose
The First American Data & Analytics Procision AVM Suite offers an unmatched combination of data depth, modeling sophistication and industry-specific solutions. Backed by one of the most comprehensive databases in the market, these models are updated daily to ensure accuracy, timeliness and confidence. Procision models use multiple data sources and six sub-models including machine learning, regression analysis, hedonic appraisal emulation and geographic-specific and historical market performance to produce highly accurate valuation with high reliability scores. The Procision AVM Suite consists of four specialized models, each designed to meet specific business needs:
- Procision Power AVM
Procision Power AVM is designed as a high-performance, lending grade AVM optimized for lending, underwriting reviews, capital markets, insurance, servicing, and early-stage loan processing. Procision Power AVM is tailored for broad applicability across all 50 U.S. states, including non-disclosure areas, and is known for its high hit rate and low valuation error.
- Procision Premier AVM
Procision Premier AVM is a highly reliable, professional grade AVM that is used in sophisticated underwriting scenarios. Procision Premier AVM is supported by full documentation and testing as required by regulators. It is not influenced by subject values and has the most stringent data requirements and confidence tolerances.
- 3. Procision Direct AVM
Procision Direct is an extremely high hit rate marketing-grade AVM that can be used for lead generation, customer targeting, and prospecting. Procision Direct can be embedded into consumer-facing websites to drive engagement and capture leads. Direct can be delivered in a national bulk file or any other sub geography.
- Procision Rental AVM
The newest addition to the Procision AVM Suite, Procision Rental AVM, delivers highly accurate estimates of monthly rents for long-term residential properties—including single-family homes, condominiums and planned unit developments—covering approximately 100 million properties nationwide. Updated daily, the Procision Rental AVM integrates First American’s industry-leading property database with advanced valuation techniques, combining machine learning and hedonic modeling to generate precise, consistent rental estimates.
It is designed for investors and real estate professionals seeking to refine acquisition strategies, set competitive rents and evaluate potential returns. Available via DataTree®, API, or bulk purchase, outputs include a monthly rent estimate, high/low range and a confidence score. While ideal for traditional rental use cases, it is not intended for short-term or vacation rental properties.
Each model in the Procision AVM suite is backed by First American’s extensive data assets—including 99% of public record data, 952K active real estate listings, and more than 8 billion document images, proprietary spatial data layers and machine learning-based confidence scoring. Procision is run on every residential property—more than 150 million—in the U.S. and updates the models’ underlying data on a daily basis. With Procision, users have access to leading-edge technology that is constantly updated and tested to ensure highly accurate, consistent results.
Conclusion
AVMs have come a long way from their early roots as rough estimation tools. Today, AVMs are powerful engines of insight capable of driving decisions across a wide spectrum of industries—from streamlining mortgage originations and powering home equity lending, to transforming real estate prospecting, informing government planning and optimizing insurance risk models.
This evolution is driven by two forces: the unprecedented volume and quality of property data now available and the rapid advancement of modeling technologies, including machine learning, spatial analytics and real-time data integration. Together, they have elevated AVMs from optional tools to mission-critical infrastructure across the real estate, finance, marketing and public sectors.
At the forefront of this transformation is First American Data & Analytics. The Procision AVM Suite isn’t just a set of models—it’s a flexible, intelligent valuation ecosystem backed by the industry’s deepest data assets and refined over decades of market experience. Whether you’re a lender looking to streamline origination, a marketing team seeking smarter lead targeting, a government agency evaluating neighborhood growth trends or an investor monitoring collateral risk, Procision delivers the precision, transparency and scale you need.
In a fast-moving market, speed matters. But so does accuracy, auditability and confidence. With First American’s AVM solutions, you don’t have to choose between them.
Ready to see what Procision™ can do for your business?
Contact us today for a customized demo, performance report or AVM consultation. Let us help you power the next generation of property decision-making—with data you can trust and models that deliver results.