Main Possibilities to Use the Statistic Methods in Real Estate Valuation

In accordance with the IVSC standards, the statistical valuation methods or mass appraisal can be used in the real estate valuation as the basis of ad-valorem taxation of property. Also, the statistical valuation can be used to determine how to distribute the financial benefits to government or semi-government authorities. The fundamentals needed to successfully applying statistical methods in assessing real estate are a well-defined legal system, a sufficient large market to ensure database consistency, a proper amount of resources and personnel and a permanent updating of the inventory and databases to ensure the accuracy of valuations. Statistical methods selected with best chance of being successfully used in assessing real estate are the type of confidence intervals based on statistical tests, linear or nonlinear multiple regression models and analytical models based on time series. The level of appraisal can be measured with the median, the mean or the weighted mean and the uniformity is measured with the range, the standard deviation, the dispersion coefficient or average absolute deviation. All those statistical tools was applied by authors on the real estate valuation in the city of Timisoara and the paper presents some examples of the best results obtained referring to residential apartments. The methods can also be applied with good results in valuating land for industrial or residential purposes. The database necessary to carry out the statistical research was made available by Darian Rom Suisse, one of the leaders on the valuation market in Romania. The period included in the analysis refers to the first four months of year 2009 as can be seen in Appendix.