Measurement Error in Residential Property Valuation: An Application of Forecast Combination

41 Pages Posted: 30 May 2015 Last revised: 18 Sep 2016

See all articles by Dennis Glennon

Dennis Glennon

Government of the United States of America - Office of the Comptroller of the Currency (OCC)

Hua Kiefer

Office of the Comptroller of the Currency

Tom Mayock

UNC Charlotte; Government of the United States of America - Office of the Comptroller of the Currency (OCC)

Date Written: July 6, 2016

Abstract

In this study we use property-level transaction data to construct several different out-of-sample forecasts for the sales of individual homes in 10 counties in Florida. We utilize a number of common forecast combination methods and analyze the properties of their forecast errors. The results from this analysis suggest that relatively simple forecast combination schemes have the potential to reduce the error in property value estimates, possibly by a wide margin. Lastly, we find that the forecast error associated with constructing valuations using popular house price indices has been very large in our sample.

Keywords: Housing Valuation, Forecast Combination

JEL Classification: C53, R31

Suggested Citation

Glennon, Dennis and Kiefer, Hua and Mayock, Tom, Measurement Error in Residential Property Valuation: An Application of Forecast Combination (July 6, 2016). Available at SSRN: https://ssrn.com/abstract=2610865 or http://dx.doi.org/10.2139/ssrn.2610865

Dennis Glennon

Government of the United States of America - Office of the Comptroller of the Currency (OCC) ( email )

250 E Street, SW
Senior Financial Economist; Economics Department
Washington, DC 20219-0001
United States
202-874-4725 (Phone)
202-874-5394 (Fax)

Hua Kiefer

Office of the Comptroller of the Currency ( email )

250 E Street, SW
Washington, DC 20219
United States

Tom Mayock (Contact Author)

UNC Charlotte ( email )

Charlotte, NC 28223
United States

Government of the United States of America - Office of the Comptroller of the Currency (OCC) ( email )

400 7th St Sw
Washington, DC 20219-0001
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
108
rank
244,391
Abstract Views
851
PlumX Metrics