A neural network based model for mass non-residential real estate price evaluation of Lisbon, Portugal

Dissertation presented as the partial requirement for obtaining a Master's degree in Statistics and Information Management, specialization in Information Analysis and ManagementAn accurate estimation of the real estate value became very important to make correct purchase and sale transaction, calculate taxes, mortgages for loans. Mass appraisal systems that use modern methodology based on artificial intelligence significantly help to deal with these issues. Objectives of this article are: using artificial neural networks (AANs) build mass appraisal model to evaluate market price of non-residential real estate of Lisbon, Portugal; evaluate performance of AANs and compare it with results generated by other models based on different methodologies and prove AANs superiority in issues connected with real estate apprising

Mass appraisal of residential apartments: An application of Random forest for valuation and a CART-based approach for model diagnostics

To the best knowledge of authors, the use of Random forest as a potential technique for residential estate mass appraisal has been attempted for the first time. In the empirical study using data on residential apartments the method performed better than such techniques as CHAID, CART, KNN, multiple regression analysis, Artificial Neural Networks (MLP and RBF) and Boosted Trees. An approach for automatic detection of segments where a model significantly underperforms and for detecting segments with systematically under- or overestimated prediction is introduced. This segmentational approach is applicable to various expert systems including, but not limited to, those used for the mass appraisal.Random forest, mass appraisal, CART, model diagnostics, real estate, automatic valuation model

Artificial Neural Network, Quantile and Semi-Log Regression Modelling of Mass Appraisal in Housing

We used a large sample of 188,652 properties, which represented 4.88% of the total housing stock in Catalonia from 1994 to 2013, to make a comparison between different real estate valuation methods based on artificial neural networks (ANNs), quantile regressions (QRs) and semi-log regressions (SLRs). A literature gap in regard to the comparison between ANN and QR modelling of hedonic prices in housing was identified, with this article being the first paper to include this comparison. Therefore, this study aimed to answer (1) whether QR valuation modelling of hedonic prices in the housing market is an alternative to ANNs, (2) whether it is confirmed that ANNs produce better results than SLRs when assessing housing in Catalonia, and (3) which of the three mass appraisal models should be used by Spanish banks to assess real estate. The results suggested that the ANNs and SLRs obtained similar and better performances than the QRs and that the SLRs performed better when the datasets were smaller. Therefore, (1) QRs were not found to be an alternative to ANNs, (2) it could not be confirmed whether ANNs performed better than SLRs when assessing properties in Catalonia and (3) whereas small and medium banks should use SLRs, large banks should use either SLRs or ANNs in real estate mass appraisal

A Neural-CBR System for Real Property Valuation

In recent times, the application of artificial intelligence (AI) techniques for real property valuation has been on the increase. Some expert systems that leveraged on machine intelligence concepts include rule-based reasoning, case-based reasoning and artificial neural networks. These approaches have proved reliable thus far and in certain cases outperformed the use of statistical predictive models such as hedonic regression, logistic regression, and discriminant analysis. However, individual artificial intelligence approaches have their inherent limitations. These limitations hamper the quality of decision support they proffer when used alone for real property valuation. In this paper, we present a Neural-CBR system for real property valuation, which is based on a hybrid architecture that combines Artificial Neural Networks and Case- Based Reasoning techniques. An evaluation of the system was conducted and the experimental results revealed that the system has higher satisfactory level of performance when compared with individual Artificial Neural Network and Case- Based Reasoning systems

Applying a CART-based approach for the diagnostics of mass appraisal models

In this paper an approach for automatic detection of segments where a regression model significantly underperforms and for detecting segments with systematically under- or overestimated prediction is introduced. This segmentational approach is applicable to various expert systems including, but not limited to, those used for the mass appraisal. The proposed approach may be useful for various regression analysis applications, especially those with strong heteroscedasticity. It helps to reveal segments for which separate models or appraiser assistance are desirable. The segmentational approach has been applied to a mass appraisal model based on the Random Forest algorithm.CART, model diagnostics, mass appraisal, real estate, Random forest, heteroscedasticity

Applying a CART-based approach for the diagnostics of mass appraisal models

In this paper an approach for automatic detection of segments where a regression model significantly underperforms and for detecting segments with systematically under- or overestimated prediction is introduced. This segmentational approach is applicable to various expert systems including, but not limited to, those used for the mass appraisal. The proposed approach may be useful for various regression analysis applications, especially those with strong heteroscedasticity. It helps to reveal segments for which separate models or appraiser assistance are desirable. The segmentational approach has been applied to a mass appraisal model based on the Random Forest algorithm.CART, model diagnostics, mass appraisal, real estate, Random forest, heteroscedasticity

Comparing Rough Set Theory with Multiple Regression Analysis as Automated Valuation Methodologies

This paper focuses on the problem of applying rough set theory to mass appraisal. This methodology was first introduced by a Polish mathematician, and has been applied recently as an automated valuation methodology by the author. The method allows the appraiser to estimate a property without defining econometric modeling, although it does not give any quantitative estimation of marginal prices. In a previous paper by the author, data were organized into classes prior to the valuation process, allowing for the if-then, or right “rule” for each property class to be defined. In that work, the relationship between property and class of valued was said to be dichotomic.mass appraisal; property valuation; rough set theory; valued tolerance relation

Contextualized property market models vs. Generalized mass appraisals: An innovative approach

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

A comparison of data mining methods for mass real estate appraisal

We compare the performance of both hedonic and non-hedonic pricing models applied to the problem of housing valuation in the city of Madrid. Urban areas pose several challenges in data mining because of the potential presence of different market segments originated from geospatial relations. Among the algorithms presented, ensembles of M5 model trees consistently showed superior correlation rates in out of sample data. Additionally, they improved the mean relative error rate by 23% when compared with the popular method of assessing the average price per square meter in each neighborhood, outperforming commonplace multiple linear regression models and artificial neural networks as well within our dataset, comprised of 25415 residential properties.mass appraisal, real estate, data mining