Real Estate Automated Valuation Modeling

The general idea behind AVMs is to try and mimic the process of real estate valuation, or at least a good part of it. We are certainly far from using AVM results without a grain of salt, having in mind the inherent uncertainty when it comes to the information we have about each particular real estate and then the marketplace in general. There are simply too many processes that influence the price, beginning with the peculiarities of specific real estate and the availability of that information in databases, and continuing with short- and long-term marketplace trends, unforeseeable changes in the economy due to a variety of factors, and, finally, the valuer’s subjectivity. This is the reason why an automated solution can’t be 100% correct, because who is to say what is a 100% correct value after all ? So the goal of AVMs is to be as precise as possible while giving enough interpretability so that a competent valuer can not only use the estimated value but also see what it was that affected the price. Adept readers in the matters we discuss will see that even real estate analytics could be of great help to the valuer since going through the piles of papers, Excel sheets, and charts is way slower than the software solution specifically tailored based on the valuers’ daily tasks. But, for now, let’s focus only on matters of prediction.   <a href="https://medium.com/@ilija.lazarevic/real-estate-automated-valuation-modeling-24f0305b237">Learn More</a>