Will the market bear your asking price? 1

Abstract

The current practice for determining market price of a real estate often relies on selecting a list of comparable sales and does not employ modern statistical techniques. The example in this paper demonstrates how one could use statistical modeling in estimating the market value of a real estate. This paper illustrates a real estate market analysis via a statistical modeling case study which allows one not only to estimate the market value of a real estate but also to learn some characteristics of the market. The statistical analysis scheme presented fits naturally in the common practice used by real estate agents as it relies on identified comparable sales as the starting point.