Automated Valuation Methods in Atypical Real Estate Markets Using the Mono-parametric Approach

Ciuna, Marina; Ruggiero, Manuela De; Manganelli, Benedetto; Salvo, Francesca; Simonotti, Marco

doi:10.1007/978-3-319-62398-6_14

Cited by 10 publications

(5 citation statements)

References 24 publications

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“…Ciuna et al. ( 2017 ) create an approach to overcome the limitations of AVMs in markets with less available data, by means of measuring the similarity degree of the comparables. Kim et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Vom Vergleichswertverfahren zum maschinellen Lernen – Methoden zur automatisierten Wertermittlung von Wohnimmobilien und deren praktische Implikationen

Stang

Krämer

Nagl

et al. 2022

Z Immobilienökonomie

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Until recently, in most countries, the use of Automated Valuation Models (AVMs) in the lending process was only allowed for support purposes, and not as the sole value-determining tool. However, this is currently changing, and regulators around the world are actively discussing the approval of AVMs. But the discussion is generally limited to AVMs that are based on already established methods such as an automation of the traditional sales comparison approach or linear regressions. Modern machine learning approaches are almost completely excluded from the debate. Accordingly, this study contributes to the discussion on why AVMs based on machine learning approaches should also be considered. For this purpose, an automation of the sales comparison method by using filters and similarity functions, two hedonic price functions, namely an OLS model and a GAM model, as well as a XGBoost machine learning approach, are applied to a dataset of 1.2 million residential properties across Germany. We find that the machine learning method XGBoost offers the overall best performance regarding the accuracy of estimations. Practical application shows that optimization of the established methods—OLS and GAM—is time-consuming and labor-intensive, and has significant disadvantages when being implemented on a national scale. In addition, our results show that different types of methods perform best in different regions and, thus, regulators should not only focus on one single method, but consider a multitude of them.

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Section: Literature Reviewmentioning

confidence: 99%

Vom Vergleichswertverfahren zum maschinellen Lernen – Methoden zur automatisierten Wertermittlung von Wohnimmobilien und deren praktische Implikationen

Stang

Krämer

Nagl

et al. 2022

Z Immobilienökonomie

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“…The application of the International Valuation Standards has prompted research to investigate the possibility of applying AVMs even in really complex real estate markets for different issues that are at stake, including best practices, real-life constraints, administrative procedures, software capabilities, expert competences, modeling frameworks, background theories, and more [29][30][31].…”

Section: Research Backgroundmentioning

confidence: 99%

Automated Valuation Methods through the Cost Approach in a BIM and GIS Integration Framework for Smart City Appraisals

et al. 2020

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The principle behind sustainable city movements is represented by the idea of “good living”, which is the possibility of having solutions and services that allow citizens to live in an easy, simple, and enjoyable way. Policies for urban quality play a central role in the slow cities manifesto, often suggesting the use of Information and Communication Technologies (ITC) in the development of interactive services for citizens. Among these, an interesting possibility is to offer citizens digital real estate consultancy services through the implementation of automated evaluation methods. An automated appraisal action—which is already complex in itself owing to the need to collect data in a consistent, standardized, but also differentiated way so as to require the adoption of real estate due diligence—collides on the operational level with the concrete difficulty of acquiring necessary data, much more so since the reference market is dark, atypical, and viscous. These operational difficulties are deepened by the epistemological nature of the appraisal discipline itself, which bases its methodology on the forecast postulate, recalling the need to objectify as much as possible the evaluation from the perspective of an intersubjective sharing argument. These circumstances have led, on the one hand, to the definition of internationally accepted uniform evaluation rules (IVS, 2017) and, on the other, to the testing of automated valuation methods aimed at returning computer-based appraisals (AVM). Starting from the awareness that real estate valuation refers essentially to information and georeferences, this paper aims to demonstrate how real estate appraisal analysis can be further improved through information technology (IT), directing real estate valuation towards objectivity in compliance with international valuation standards. Particularly, the paper intends to show the potential of combining geographic information systems (GISs) and building information models (BIMs) in automated valuation methods through the depreciated reproduction cost. The paper also proposes a BIM-GIS semi-automatic prototype based on the depreciated reconstruction cost through an experimentation in Rende (Italy).

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“…Other studies assessed the comparable sample's similarity and reliability degrees in the market-oriented appraisal method, particularly the Market Comparison Approach (MCA) [31][32][33][34]. These studies introduced two different similarity coefficients, a reliability coefficient and two second level indexes, which combine similarity and reliability measures.…”

Section: Current Applications Of Similarity Coefficientsmentioning

confidence: 99%

An Integrated Procedure for Ex-Ante Evaluations of Refurbishment Costs in Healthcare Facilities

2020

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This paper focuses on the valuation of refurbishment costs for healthcare facilities. The determination of the more reliable approach for experimental verification is a research topic of great interest, especially because previous literature on the matter is limited. This study examines ex-ante cost valuations in the refurbishment of healthcare buildings while using similarity to estimate the costs that are based on the amount of already accomplished renovations. The methodology involved a desk analysis deter-mining the technical valuation of intervention needs, and similarity coefficient applications providing a refurbishment cost valuation. The application was conducted in the Friuli—Venezia Giulia Region in Italy, where hospitals show structural, layout, and plants deficits with respect to current regulations, and a technical deepening to identify critical issues is required to prepare a multi-year intervention plan. The case study results showed that this procedure requires little initial information to run analyses and its application can support investment budget planning purposes.

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Automated Valuation Methods in Atypical Real Estate Markets Using the Mono-parametric Approach

Cited by 10 publications

References 24 publications

Vom Vergleichswertverfahren zum maschinellen Lernen – Methoden zur automatisierten Wertermittlung von Wohnimmobilien und deren praktische Implikationen

Vom Vergleichswertverfahren zum maschinellen Lernen – Methoden zur automatisierten Wertermittlung von Wohnimmobilien und deren praktische Implikationen

Automated Valuation Methods through the Cost Approach in a BIM and GIS Integration Framework for Smart City Appraisals

An Integrated Procedure for Ex-Ante Evaluations of Refurbishment Costs in Healthcare Facilities

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