Sales Comparison Approach Indicating Heterogeneity of Particular Type of Real Estate and Corresponding Valuation Accuracy

Abstract

The article focuses on heterogeneity of goods, namely real estate and consequently deals with market valuation accuracy. The heterogeneity of real estate property is, in particular, that every unit is unique in terms of its construction, condition, financing and mainly location and thus assessing the value must necessarily be difficult. This research also indicates the rate of efficiency of markets across the types based on their level of variability. The research is based on two databases consisting of various types of real estate with specific market parameters. These parameters determine the differences across the types and reveal heterogeneity. The first database has been set on valuations by sales comparison approach and the second one on data of real properties offered on the market. The methodology is based on univariate and multivariate statistics of key variables of those databases. The multivariate analysis is performed by Hotelling T 2 control chart and statistics with appropriate numerical characteristics. The results of both databases were joint by weights with regard to the dependence criterion of the variables. The final results indicate potential valuation accuracy across the types. The main contribution of the research is that the evaluation was not only derived from the price deviation or distribution, but it also draws from causes of real property heterogeneity as a whole.

The Functioning of the Real Estate Market: Dynamics of Price Formation and the Sale of Apartments

“…The main pricing strategies used in practice by the developers (Smith et al, 2016;Rattermann, 2007;Cupal, 2017;Gordon and Winkler, 2017) include:…”

Technical condition of houses: a framework for the Czech market

“…In the case of real estate, it is almost impossible to find identical real estate because these products are characterized by high heterogeneity. This heterogeneity impacts valuation accuracy (Dunse et al , 2010; Cupal, 2017). Knowledge of the prevailing market conditions is necessary for successfully determining the value by the market approach ( International Valuation Standards 2017 , 2017).…”

Gayrimenkul değerlemesinde geleneksel yöntemler

“…Cupal, (2016) tarafından yapılan çalışmada, 140 emsal değer ve farklı türlerde 849 adet taşınmaz bulunan bir veri seti üzerinde değeri etkileyen 11 adet bağımsız değişken kullanmak suretiyle konut değerlemesinde Lineer Regresyon Modeli ile bulunan değeri etkileyen faktörleri ve emsal karşılaştırmada kullanılan değer dengeleme faktörlerinin karşılaştırmasını yapmış ve kısmen aralarındaki benzerliği ortaya koymuştur. 140 değerleme verisi ve 500 adet gerçek satış fiyatı verilerini kullanarak veri heterojenliğinin yapılan değerlemenin doğruluğuna etkisini istatistiki yöntemler kullanarak araştırmıştır (Cupal, 2017). Karşılaştırma yöntemi ile yapılan değerleme işlemlerinde birim seçimini ele almaktadır (Donald & Jess, 1996) Arazi, insanların temel faaliyet alanıdır.…”