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Identification and Classification of Real Estate Features for the Purpose of an Algorithm-Based Valuation– Case Study within Szczecin

Author

Listed:
  • Kokot Sebastian

    (University of Szczecin, Institute of Econometrics and Statistics)

  • Gnat Sebastian

    (University of Szczecin, Institute of Econometrics and Statistics)

Abstract

Research background: The article discusses the issue of the identification and measurement of market characteristics of real estate for valuation purposes. This problem is the most difficult stage of the whole valuation process in terms of both a substantive, methodological and analytical basis.Goal: The aim of the research is to outline and explore on the basis of literature studies as well as developed problems to be solved in the process of mass valuation together with the presentation of an exemplary solution.Methodology: In the theoretical part a hypothetical-deductive method which consists of developing a certain hypothesis and deducing its consequences was applied. The empirical section uses the method of scientific discussion among scientists and practicing valuers and, for the presentation of the results; some graphical methods were used for a statistical analysis.Results: As a result of the conducted research, criteria to be used in identifying and classifying market characteristics for the purposes of valuation were identified and a set of market characteristics of properties was developed along with a method of identifying their states for the purposes of mass valuation.Novelty: The article proves that the problem of the identification and classification of market characteristics of real estate for valuation purposes is extremely important from the point of view of the valuation process and the results obtained as a result of it as well. In addition, for some features, it is proposed to develop special measures such as the plot shape attractiveness ratio. This meets the problem of the objective measurement of market features of real estate. In relation to other features, the legitimacy of the expert approach was pointed out.

Suggested Citation

  • Kokot Sebastian & Gnat Sebastian, 2019. "Identification and Classification of Real Estate Features for the Purpose of an Algorithm-Based Valuation– Case Study within Szczecin," Folia Oeconomica Stetinensia, Sciendo, vol. 19(2), pages 38-55, December.
    • Handle: RePEc:vrs:foeste:v:19:y:2019:i:2:p:38-55:n:3
    DOI: 10.2478/foli-2019-0012
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    References listed on IDEAS

    as
    1. Konstantinos Tzioumis, 2017. "Appraisers and Valuation Bias: An Empirical Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 45(3), pages 679-712, July.
    2. Shuang Zhu & R. Pace, 2012. "Distressed Properties: Valuation Bias and Accuracy," The Journal of Real Estate Finance and Economics, Springer, vol. 44(1), pages 153-166, January.
    3. Arthur Korteweg & Morten Sorensen, 2016. "Estimating Loan-to-Value Distributions," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 44(1), pages 41-86, February.
    4. Cho, Man & Megbolugbe, Isaac F, 1996. "An Empirical Analysis of Property Appraisal and Mortgage Redlining," The Journal of Real Estate Finance and Economics, Springer, vol. 13(1), pages 45-55, July.
    5. Bradbury, Katharine L. & Mayer, Christopher J. & Case, Karl E., 2001. "Property tax limits, local fiscal behavior, and property values: evidence from Massachusetts under Proposition," Journal of Public Economics, Elsevier, vol. 80(2), pages 287-311, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    property valuation; market analysis;

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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