The Effect of Hybrid Attributes on Property Prices

Abstract

This study focuses on the sales comparison and the adjustment grid methods, under the framework of the market approach to valuation. The literature mostly focuses on the structural qualities of the properties, referring to the buildings and their locational characteristics, which pertain to their positioning within the urban fabric. Here we focus on a particular set of attributes which depend on how a building is placed in a specific land plot and relate to the surrounding environment. The term «hybrid» is used to identify this class of attributes. It is shown that hybrid attributes affect property prices and should not be disregarded by practitioners and appraisers. The role played by hybrid characteristics is analyzed based on the methodological foundation of the hedonic and the adjustment grid methods. The derived linear and log-linear models are tested by means of a case study. The models prove to have high explanatory power. The weight of each hybrid attribute is estimated to vary between 1% and 10%. Overall, these attributes contribute to 17-23% of the property prices. The validation performed using the grid adjustment method shows that the estimated marginal prices are effective in adjusting the prices per unit area of the comparables.

The Price Premium in Green Buildings: A Spatial Autoregressive Model and a Multi-Criteria Optimization Approach

“…Along with the dependent variable, the predictors are listed in Table 1. Aside from the energy rating bands and the energy performance index, they can be roughly clustered into two groups, as is usual in real estate hedonic modeling [109,110]: building features, on the one hand, and land characteristics, on the other. For the selection of building and land attributes, we referred to the broad literature on hedonic price modeling [111][112][113][114].…”