Determining the value of commercial real estate, among the largest of asset classes for investors, remains difficult, likely lending itself to the application of new machine-based valuation models that among other things take advantage of “hyper-local” information about real estate locations.
In a paper published in June, Dutch researchers argued that an “automated valuation model” outperformed traditional real estate appraisals, with an error rate of about 9 percent. The model also brings with it the ability to “produce an instant [property] value at every moment in time, at a very low cost.” the researchers said in a paper title: “Big Data in Real Estate? From Manual Appraisal to Automated Valuation.”
Author: George Leopold