ERES Annual Conference, Delft Automated Valuation Models: A Variety of Projects in Research and Industry ERES Annual Conference, Delft ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use ERES 2017
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
AVM Systematization (Perspectives) Automated Valuation Models - A Variety of Projects in Research and Industry A number of 6 top-level-perspectives are considered in the AVM systematization approach Scale of Valuation Valuation Methods AVM Systematization (Perspectives) Contries Application Fields Property Type User ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Main perspective of the Dissertation Automated Valuation Models - A Variety of Projects in Research and Industry 67 relevant sources were analyzed and used for the AVM systematization approach Used Literature Mass Appraisal Academia 35 2001 - 2017 CAMA Teaching Material 2001 - 2017 20 Research Paper Portfolio Valuation 6 2008 - 2017 Monographs AVM 1998 - 2017 51 Valuation Guidelines Standards Batch Valuation 3 2013 - 2017 White Paper Practice Time period of sources Number of Sources Subject Subject Number of Sources Time period of sources Main perspective of the Dissertation ERES 2017
Literature-based approach: An example of 20 relevant sources Automated Valuation Models - A Variety of Projects in Research and Industry Literature-based approach: An example of 20 relevant sources ERES 2017
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry AVMs are used in valuation processes with different scales: From single valuations to large-scale valuations ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
4 general types of modelling are used within the model specification Automated Valuation Models - A Variety of Projects in Research and Industry 4 general types of modelling are used within the model specification ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Hedonic models continue to be the most common basis for AVM Automated Valuation Models - A Variety of Projects in Research and Industry Hedonic models continue to be the most common basis for AVM ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Nearly 50 different calibration methods are mentioned in the relevant literature ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Nearly 50 different calibration methods Automated Valuation Models - A Variety of Projects in Research and Industry Nearly 50 different calibration methods are mentioned in the relevant literature ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry The MRA continues to be the main calibration instrument in an AVM development ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry A multi-dimensional AVM toolbox can be derived from the empirical analysis AVM model specification Sales Comparison Approach Cost Approach Income Approach Hedonic Price Theory / Methods model calibration Alterntive / Innovative Methods Established /Traditional Methods Hedonic Modells Time Series Analysis Emerging Methods Other Estab. Methods ANN MRA Modelling Spatial Effects Hybrid Systems ERES 2017
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
76 Application fields and cases could be identified Automated Valuation Models - A Variety of Projects in Research and Industry 76 Application fields and cases could be identified ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
AVM supports core processes of real estate management Automated Valuation Models - A Variety of Projects in Research and Industry AVM supports core processes of real estate management Transaction Other REAM Purposes Financing AVM: Process related Perspective Appraisal process redesign Accounting Insurance Taxation Audit ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
AVM most commonly used within core process „Financing“ Automated Valuation Models - A Variety of Projects in Research and Industry AVM most commonly used within core process „Financing“ ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
More detailed breakdown of core processes (5 levels) Automated Valuation Models - A Variety of Projects in Research and Industry More detailed breakdown of core processes (5 levels) ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry 7 out of 10 most common use cases are related to core process „Finance“ ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry AVMs are currently primarily developed and used for residential properties / portfolios ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
35 potential users were assigned to the identified application fields Automated Valuation Models - A Variety of Projects in Research and Industry 35 potential users were assigned to the identified application fields ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
AVM Systematization – User Automated Valuation Models - A Variety of Projects in Research and Industry AVM Systematization – User ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
AVM Systematization – User Automated Valuation Models - A Variety of Projects in Research and Industry AVM Systematization – User ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry In total 26 countries from five continents are using AVM for different purposes ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Within the US, more than 50% of all identified AVM applications are documented ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
All countries with the most applications use AVM for audit Automated Valuation Models - A Variety of Projects in Research and Industry All countries with the most applications use AVM for audit ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Content Non-transparancy and heterogeneity of AVM: The problem of various terms, definitions and fields of use Systematization of AVM: A literature-based approach Method related Perspective Process related Perspective Property related Perspective User related Perspective Country related Perspective Conclusion ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Conclusion - AVM Results Automated Valuation Models - A Variety of Projects in Research and Industry Conclusion - AVM Results Methods: The HPT / regression continues to be the central model of AVMs. The current research develops and tests innovative, more flexible methods and combines existing methods to hybrid model solutions. Scale: AVM valuations range from the individual valuation over batch/portfolio valuations to mass appraisal Application fields: 76 different application cases were identified and could be assigned to 8 higher-level application fields. The current focus of the AVM application is still on the field of "Financing" and "Audit“ Property Types: AVMs are currently mainly developed and applied for residential real estate purposes . Especially in the field of commercial and special properties, there are just very few documented projects User: 35 potential users were identified and assigned for the identified application purposes. The catalog of users is not exhaustive. Further users are possible. Countries: In total 26 countries from five continents use AVM for different purposes. There is a need for research, in particular, for countries which have a much lower market transparency and have not enough data for the conventional modeling process. ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Thank you for your attention! Automated Valuation Models - A Variety of Projects in Research and Industry Thank you for your attention! ERES 2017 Andreas Kindt, M.Sc. / Professur Immobilienökonomie / Bauhaus-Universität Weimar / www.immo-oek.de
Automated Valuation Models - A Variety of Projects in Research and Industry Contact Bauhaus-Universität Weimar Department: Real Estate Economics Marienstraße 7a D-99423 Weimar PhD-Student: Andreas Kindt M.Sc. Telefon: +49 (0)3643 584383 Email: andreas.kindt@uni-weimar.de Supervisor: PD Dr. habil. Steffen Metzner MRICS Telefon: +49 (0)3643 584384 Email: steffen.metzner@uni-weimar.de Internet: www.immo-oek.de ERES 2017