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The Analytical Foundations of Adjustment Grid Methods

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  • Peter F. Colwell
  • Roger E. Cannaday
  • Chunchi Wu

Abstract

Within the market data approach to real estate appraisal, two basic types of analysis generally are used: (1) regression analysis; and (2) adjustment grid methods. The focus of this paper is on the adjustment grid methods. Three such methods are identified in the appraisal literature, but their analytical foundations are not clearly presented. The primary objective of this paper is to clarify the analytical foundations of each method. In addition, various ways to estimate the adjustment factors needed to apply the grid methods and a weighting scheme for reconciliation of indicated values are presented. Also, the possible advantage of grid‐based over purely regression‐based predictions is identified.

Suggested Citation

  • Peter F. Colwell & Roger E. Cannaday & Chunchi Wu, 1983. "The Analytical Foundations of Adjustment Grid Methods," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 11(1), pages 11-29, March.
    • Handle: RePEc:bla:reesec:v:11:y:1983:i:1:p:11-29
    DOI: 10.1111/1540-6229.00277
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    Cited by:

    1. Brent W. Ambrose, 1990. "An Analysis of the Factors Affecting Light Industrial Property Valuation," Journal of Real Estate Research, American Real Estate Society, vol. 5(3), pages 355-370.
    2. Joseph B. Lipscomb & J. Brian Gray, 1995. "A Connection between Paired Data Analysis and Regression Analysis for Estimating Sales Adjustments," Journal of Real Estate Research, American Real Estate Society, vol. 10(2), pages 175-184.
    3. Maurizio d’Amato, 2007. "Comparing Rough Set Theory with Multiple Regression Analysis as Automated Valuation Methodologies," International Real Estate Review, Global Social Science Institute, vol. 10(2), pages 42-65.
    4. Oana CHINDRIŞ-VĂSIOIU, 2014. "Economic Agent Behavior On Real Estate Market," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 3(1), pages 1-8, January.
    5. Michalis Doumpos & Dimitrios Papastamos & Dimitrios Andritsos & Constantin Zopounidis, 2021. "Developing automated valuation models for estimating property values: a comparison of global and locally weighted approaches," Annals of Operations Research, Springer, vol. 306(1), pages 415-433, November.
    6. James A. Bryant & Donald R. Epley, 1998. "Cancerphobia: Electromagnetic Fields and Their Impact on Residential Loan Values," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 115-129.
    7. Serena Artese & Manuela De Ruggiero & Francesca Salvo & Raffaele Zinno, 2021. "Economic Convenience Judgments among Seismic Risk Mitigation Measures and Regulatory and Fiscal Provisions: The Italian Case," Sustainability, MDPI, vol. 13(6), pages 1-25, March.
    8. Timothy P. Cronan & Donald R. Epley & Larry G. Perry, 1986. "The Use of Rank Transformation and Multiple Regression Analysis in Estimating Residential Property Values With A Small Sample," Journal of Real Estate Research, American Real Estate Society, vol. 1(1), pages 19-31.
    9. Sonia Yousfi & Jean Dubé & Diègo Legros & Sotirios Thanos, 2020. "Mass appraisal without statistical estimation: a simplified comparable sales approach based on a spatiotemporal matrix," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(2), pages 349-365, April.
    10. R. Kelley Pace, 1998. "Total Grid Estimation," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 101-114.
    11. Jean Dubé & Maha AbdelHalim & Nicolas Devaux, 2021. "Evaluating the Impact of Floods on Housing Price Using a Spatial Matching Difference-In-Differences (SM-DID) Approach," Sustainability, MDPI, vol. 13(2), pages 1, January.
    12. George H. Lentz & Ko Wang, 1998. "Residential Appraisal and the Lending Process: A Survey of Issues," Journal of Real Estate Research, American Real Estate Society, vol. 15(1), pages 11-40.
    13. Copiello Sergio & Cecchinato Filippo & Salih Mohammed Haj, 2021. "The Effect of Hybrid Attributes on Property Prices," Real Estate Management and Valuation, Sciendo, vol. 29(4), pages 36-52, December.
    14. Kehinde Adekunle ADETILOYE & Patrick Omoruyi EKE, 2014. "A Review of Real Estate Valuation and Optimal Pricing Techniques," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(12), pages 1878-1893, December.
    15. Joseph B. Lipscomb & J. Brian Gray, 1990. "An Empirical Investigation of Four Market-Derived Adjustment Methods," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 53-66.
    16. Martin Cupal, 2017. "Sales Comparison Approach Indicating Heterogeneity of Particular Type of Real Estate and Corresponding Valuation Accuracy," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(3), pages 977-985.
    17. Rohana Abdul Rahman, 2011. "Variations in Implementing SCM to Minimize Subjectivity and a Future Direction for Malaysia," ERES eres2011_178, European Real Estate Society (ERES).
    18. Hans R. Isakson, 1998. "The Review of Real Estate Appraisals Using Multiple Regression Analysis," Journal of Real Estate Research, American Real Estate Society, vol. 15(2), pages 177-190.

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