Interpreting Housing Prices with a MultidisciplinaryApproach Based on Nature-Inspired Algorithms and Quantum Computing

Abstract

Current technology still does not allow the use of quantum computers for broader and individual uses; however, it is possible to simulate some of its potentialities through quantum computing. Quantum computing can be integrated with nature-inspired algorithms to innovatively analyze the dynamics of the real estate market or any other economic phenomenon. With this main aim, this study implements a multidisciplinary approach based on the integration of quantum computing and genetic algorithms to interpret housing prices. Starting from the principles of quantum programming, the work applies genetic algorithms for the marginal price determination of relevant real estate characteristics for a particular segment of Naples’ real estate market. These marginal prices constitute the quantum program inputs to provide, as results, the purchase probabilities corresponding to each real estate characteristic considered. The other main outcomes of this study consist of a comparison of the optimal quantities for each real estate characteristic as determined by the quantum program and the average amounts of the same characteristics but relative to the real estate data sampled, as well as the weights of the same characteristics obtained with the implementation of genetic algorithms. With respect to the current state of the art, this study is among the first regarding the application of quantum computing to interpretation of selling prices in local real estate markets.

Real Estate Valuations with Small Dataset: A Novel Method Based on the Maximum Entropy Principle and Lagrange Multipliers

“…In real estate markets, accuracy in property valuations is a fundamental element for making informed decisions and effective investment strategies. The complex dynamics that characterize real estate markets, together with the high differentiation of properties, make the adoption of advanced approaches crucial to obtaining accurate valuations [1,2].…”

“…The causes of these phenomena can be traced back to a series of factors, including resistance to change in the real estate sector, the lack of standardization in registration practices, the absence of regulatory requirements that mandate complete disclosure of information, the limitations or incompleteness of information in public data, and the reticence of private individuals in disclosing transaction prices. The relevance of the negative impacts of all these factors is evident in the understanding of real estate markets, property valuations, and investment decisions within the real estate sector due to information asymmetries [2].…”

Adoption of Quantum Computing in Economic Analysis: Potential and Challenges in Distributed Information Systems

“…In the context of economic analysis, this can include better portfolio optimization, deeper risk analysis, as well as more accurate economic forecasting. Therefore, the potential use of quantum computing in economics is very attractive, especially when applied to distributed information systems that enable access to distributed computing resources across networks (De Paola et al, 2023).…”