In a previous post I promised to provide a more in-depth explanation of using simple linear regression to adjust comparable sales. Today I will fulfill that promise. To do so, I will use an example of a size adjustment from a recent commercial appraisal I performed on an office building in Louisville, Kentucky. Appraisers have known for years … [Read more...]
Adjusting Comparable Sales Using Multiple Linear Regression Equation- Downloadable Spreadsheet
The most accurate method to derive adjustments applied to comparable sales is to perform a multiple linear regression on a large body of sales. The question then becomes "How can I use the equation to adjust my comparable sales?" Well, it took me some time to figure this out but here's a spreadsheet that does just that. Here's a link to a page on … [Read more...]
Real Estate Trends in Louisville, Kentucky
If you're not using statistical analysis to identify trends, well, you should be. Speculate all you like about what's going on in the market but the bottom line is mathematics. I remember one teacher stating that statistics was developed to evaluate probabilities within the gambling industry. No surprise there. In case you weren't aware of it, the … [Read more...]
Using Multiple Linear Regression to Appraise Real Estate
Those of you who took statistics in college probably remember the class with varying degrees of fondness. Personally, I loved my statistics class. I realized at the time that multiple linear regression was the perfect tool to quantify the effect of various property characteristics on the overall value. The theory of statistics is the mathematical … [Read more...]
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