An Exploration of Neural Networks and Its Application to Real Estate Valuation

Elaine M. Worzala (), Margarita Lenk () and Ana Silva
Additional contact information
Elaine M. Worzala: Department of Finance and Real Estate Colorado State University Fort Collins, Colorado 80523, http://www2.biz.colostate.edu/depts/Finance/finance.htm
Margarita Lenk: Department of Accounting and Taxation Colorado State University Fort Collins, Colorado 80523, http://www.cba.ua.edu/cbasta.html
Ana Silva: Department of Information Systems Colorado State University Fort Collins, Colorado 80523, http://www.cba.ua.edu/cbasta.html

Journal of Real Estate Research, 1995, vol. 10, issue 2, pages 185-202

Abstract: This research applies neural network (NN) technology to real estate appraisal and compares the performance of two NN models in estimating the sales price of residential properties with a traditional multiple regression model. The study is based on 288 sales of homes in Fort Collins, Colorado. Results do not support previous findings that NNs are a superior tool for appraisal analysis. Furthermore, significant problems were encountered with the NN models: inconsistent results between packages, inconsistent results between runs of the same package, and long run times. Any appraiser who plans on using this new technology would do so with caution.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 1995
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