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Real Estate Dictionaries Across Space and Time

Author

Listed:
  • Adam D. Nowak

    (West Virginia University)

  • Bradley S. Price

    (West Virginia University)

  • Patrick S. Smith

    (San Diego State University)

Abstract

Leveraging high-dimensional variable selection methods, we show the textual information provided in real estate agents’ remarks about a property can be used to address spatial and temporal heterogeneity in housing markets. Including the textual information in the pricing model decreases in-sample prediction errors by as much as 18.7% at the MSA-level and 39.1% at the zip code level. These results are robust to transforming the raw text using a real estate specific word list, the choice of n-grams, word stemming, and heteroscedasticity in the hedonic and repeat-sales models. These findings suggest the raw text in the remarks can be included directly in predictive pricing models.

Suggested Citation

  • Adam D. Nowak & Bradley S. Price & Patrick S. Smith, 2021. "Real Estate Dictionaries Across Space and Time," The Journal of Real Estate Finance and Economics, Springer, vol. 62(1), pages 139-163, January.
    • Handle: RePEc:kap:jrefec:v:62:y:2021:i:1:d:10.1007_s11146-019-09740-w
    DOI: 10.1007/s11146-019-09740-w
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    References listed on IDEAS

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    2. Nilsson, Isabelle & Delmelle, Elizabeth C., 2023. "Smart growth as a luxury amenity? Exploring the relationship between the marketing of smart growth characteristics and neighborhood racial and income change," Journal of Transport Geography, Elsevier, vol. 106(C).

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