Comparative Statistical Analysis of the Main Approaches to Property Valuation
Comparative Statistical Analysis of the Main Approaches to Property Valuation

Summary/Abstract: This paper is oriented to provide comparative statistical analysis of real estate valuation data received on the basis of classical and computerized valuation approaches. The paper main objective is to compare accuracy of valuation results which could be expected with utilization of classical valuation approach and those from automated valuation models. The analysis provided is based on initial data from US market, MSCI investment and analytical agency global data and results received from 2 developed combined cluster-neural models application. To assure grounded comparison coefficient of data scattering to measure range of valuation results distribution for different approaches was used. For classical analysis minimum required volume of samples or number of comparable needed are established on the basis of statistical theory of small samplings. Results achieved for Ukrainian real estate market with less reliable basic statistical data demonstrated further remarkable increase of scattering coefficient. Statistical calculations performed on the basis of developed 2 cluster-neural network models resulted in scattering coefficients for the same accuracy level equal to 2.56 and 2.84, correspondingly. Based on broad statistical information analyzed paper demonstrates and compares accuracy expected from application of classical and computerized approaches of residential assets valuation. Small sampling statistical theory application for assessing number of comparable necessary for classical valuation market approach is demonstrated.

• Details
• Contents