Estimating the market value of a proposed townhouse development

Janßen, Christian; Yang, Zan

doi:10.1108/14635789910294912

Cited by 9 publications

(7 citation statements)

References 8 publications

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“…A sample of two hundred residential units sold in the years 2016-2017 were collected for each of the three Italian cities analyzed. Regarding the selection of the factors that mainly contribute to the formation of the selling prices in the corresponding market segment of each property of the study samples, the reference literature has widely highlighted the unavoidable trade-off between bias from omitted variables and increased sampling variance associated with collinearity that is involved in this phase [103][104][105][106], even if there is a relative agreement on the major influencing factors [107,108]. In this research, the influencing factors have been identified by taking into account the indications of local appraisers and real estate agents consulted [109].…”

Section: Case Studiesmentioning

confidence: 99%

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

et al. 2019

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The present research takes into account the current and widespread need for rational valuation methodologies, able to correctly interpret the available market data. An innovative automated valuation model has been simultaneously implemented to three Italian study samples, each one constituted by two-hundred residential units sold in the years 2016–2017. The ability to generate a “unique” functional form for the three different territorial contexts considered, in which the relationships between the influencing factors and the selling prices are specified by different multiplicative coefficients that appropriately represent the market phenomena of each case study analyzed, is the main contribution of the proposed methodology. The method can provide support for private operators in the assessment of the territorial investment conveniences and for the public entities in the decisional phases regarding future tax and urban planning policies.

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Section: Case Studiesmentioning

confidence: 99%

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

et al. 2019

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“…The selection of explanatory variables to be included in a model always involves an unavoidable trade-off between bias from omitted variables and increased sampling variance associated with collinearity (Grether and Mieszkowski, 1974;Gelfand et al, 1998;McCluskey et al, 2000;Selim, 2009). In the literature, there is relative agreement, however, on what constitutes major influencing factors (Janssen and Yang, 1999;Bourassa et al, 2010).…”

Section: The Case Studiesmentioning

confidence: 99%

Multicriteria analysis and genetic algorithms for mass appraisals in the Italian property market

Morano

Tajani

Locurcio

2018

IJHMA

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Purpose This paper aims to test and compare two innovative methodologies (utility additive and evolutionary polynomial regression) for mass appraisal of residential properties. The aim is to deepen their characteristics, by exploring the potentialities and the operating limits. Design/methodology/approach With reference to the same case studies, concerning samples of residential properties recently sold in three Italian cities, the two procedures are tested and the results are compared. The first method is the utility additive, which interprets the process of the property price formation as a multi-criteria selection of multi-objective typology, where the selection criteria are the property characteristics that are decisive in the real estate market; the second method is a hybrid data-driven technique, called evolutionary polynomial regression, that uses multi-objective genetic algorithms to search those models expressions that simultaneously maximize accuracy of data and parsimony of mathematical functions. Findings The outputs obtained from the experimentation highlight the potentialities and the limits of the two methodologies, as well as the possibility of jointly applying them to interpret and predict the real estate phenomena in a more realistic representation. Originality value In all countries, mass appraisal techniques have become strategic for the definition of management and enhancement policies of public and private property assets, in the case of investments of technical and economic refunctionalization (energy, environment, etc.), and for the alienation of buildings no longer suitable for public needs (military barracks, hospitals, areas in disuse, etc.). In this context, the use of mass appraisal techniques for residential properties assumes a leading role for sector operators (buyers, sellers, institutions, insurance companies, banks, real estate funds, etc.). Therefore, the results of the applications outline the potentialities of the two methodologies implemented and the opportunity of further insights of the topics that have been dealt with in this research.

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“…The selection of the explanatory variables to include in an econometric model is always somewhat arbitrary and involves an unavoidable trade-off between bias from omitted variables and increased sampling variance associated with collinearity (Grether and Mieszkowski, 1974;Gelfand et al, 1998;McCluskey et al, 2000;Oven and Pekdemir, 2006;Selim, 2009;Ozus, 2009). There is relative agreement, however, on what constitutes major influencing factors ( Janssen and Yang, 1999;Bourassa et al, 2010). Some authors have analyzed the main characteristics to be considered in the valuation of corporate real estate (Nourse and Roulac, 1993), by identifying the fundamental classes of 330 JPIF 36,4 influencing factors (Osgood, 2004) and highlighting the importance of location and site selection factors (Rabianski et al, 2001).…”

Section: Variables Of the Modelmentioning

confidence: 99%

Automated valuation models for real estate portfolios

Tajani

Morano

Ntalianis³

2018

JPIF

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Purpose As regards the assessment of the market values of properties that compose real estate portfolios, the purpose of this paper is to propose and test an automated valuation model. In particular, the method defined allows for providing for objective, reliable and “quick” valuations of the assets in the phases of periodic reviews of the property values. Design/methodology/approach Aiming at both predictive and interpretative purposes, the method, based on multi-objective genetic algorithms to search those model expressions that simultaneously maximize the accuracy of the data and the parsimony of the mathematical functions, is applied to a sample data of office properties characterized by medium and large size, located in the city of Milan (Italy) and sold in the period between 2004 and 2015. Findings The model obtained could be an integration of the canonical methodologies (market approach, income approach, cost approach) implemented in the assessment of the market values of properties, so as to provide an additional tool to verify the results. In particular, the inclusion of economic variables in the model is consistent with the need to reiterate the valuations, contextualizing them to the locational characteristics and to the current property cycle phase in the specific area. Practical implications The model can be applied by all the operators involved in the periodic reviews of the values of property portfolios: from real estate funds’ insiders, in order to monitor the values obtained through the canonical approaches, to the public institutions, such as the revenue agencies, in order to ensure the fair payment of the taxes through the updating values of the properties according to the actual and current market trends. Originality/value The method proposed can be a valid support for all public and private entities that hold significant property assets and that, for various reasons (periodic reviews of the balance sheets, sales, enhancement, investment, etc.), require cyclical updated values of the properties. The automated valuation model developed can be used for the assessment of “comparison” values with the estimates values obtained by other assessment techniques, in order to ensure a further monitoring tool of the results from the subjects involved.

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Estimating the market value of a proposed townhouse development

Cited by 9 publications

References 8 publications

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

Contextualized Property Market Models vs. Generalized Mass Appraisals: An Innovative Approach

Multicriteria analysis and genetic algorithms for mass appraisals in the Italian property market

Automated valuation models for real estate portfolios

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