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The 2010 Eureape Real Estate Society Conference June. 25 th 2010. The Improvement of Housing Appraisal Process with Street Block Housing Price Index. Chung-Hsien Yang National Pingtung Institute of Commerce, Taiwan Szu-Jung Huang
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The 2010 Eureape Real Estate Society Conference June. 25th 2010 The Improvement of Housing Appraisal Process with Street Block Housing Price Index Chung-Hsien Yang National Pingtung Institute of Commerce, Taiwan Szu-Jung Huang National Pingtung Institute of Commerce, Taiwan
What problems in Mass Appraisal? • Poor attributes • Limited data records and update • Accuracy (still not great) • Limited type (typical only) • Limited Location
What problems in Location? • Traditional location—county / district --Limited identify --Poor accuracy • GIS location—(Xn,Yn) relationship --Poor economics meaning --Sampling orient in location relationship
Solution in this paper • Street Block (SB) Price factor --use the mean price in street block (single or merge street blocks) --Modeling by sorting or comparison the Street Blocks
Advantage in SB solution • Smaller location from traditional • Real and stable location relationship • Clear economics meaning • Easy to judge the location factor and comparison the samples’ relationship
The Data(1/2) • The transaction records of housing from broker in Da-An district/Taipei/Taiwan • 2958 observations in 2006Q1~2008Q3 and 15% of market share in Da_An district • Building type: all is apartment house • Outliers detected (MRA model) and delete • 10% out-sample and 90% in-sample by Quarterly district stratified random sampling
The Data(2/2) We follow Yang and Huang(2009) developed street block price index in Da_An district/Taipei city. We use MRA with street block dummy and 3 years panel data model. There are 47 blocks in the index.
Taipei city (台北市) Taiwan Map MRT : Zhongxiao Fuxing (忠孝復與) MRT:Taipei main station (台北車站) Daan district (大安區)
The Model • The OLS form (semi-log) P: total price X: attributes of house L: location or street block factors T: Timing dummy variables
The Variables • Attributes of house: building area, sq. term; building age, sq. term; xth of floor, sq. term; total floor; building type; land area; MRT distance; car site dummy • Time Dummy var. : 2006Q1~2008Q2=1, 2008Q3=0
Empirical process • Sampling 100 times by quarterly for insample(90%) and outsample(10%) • Run model1~model5 by various insample • Check HitRate(10%, 20% of bias) and MAPE (mean absolute percentage error ) by various outsamples • Test the difference of various models by t test.
Conclusion • The Street Block Price factors has more quality control and better accuracy than traditional Mass Appraisal. • Both the relationship of street blocks in price and the level of street block price have improved for Mass Appraisal.