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The Linear Algebra of the Sales Comparison Approach

Author

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  • Hans R. Isakson

    () (University of Northern Iowa, Cedar Falls, IA 50614-0124)

Abstract

This study presents the sales comparison approach to value as a system of linear algebra equations. The difference between appraiser and academician views of this system of equations is shown to pivot on the one-price assumption. The need of appraisers to subjectively derive adjustment factors is shown to be an artifact of the common practice of appraisers to assume multiple indicated values. The use of multiple regression analysis and other statistical techniques by academicians is shown to be possible only given the one-price assumption. Suggestions are presented for the improvement of both views.

Suggested Citation

  • Hans R. Isakson, 2002. "The Linear Algebra of the Sales Comparison Approach," Journal of Real Estate Research, American Real Estate Society, vol. 24(2), pages 117-128.
  • Handle: RePEc:jre:issued:v:24:n:2:2002:p:117-128
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    References listed on IDEAS

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    Cited by:

    1. Thanos, Sotirios & Dubé, Jean & Legros, Diègo, 2016. "Putting time into space: the temporal coherence of spatial applications in the housing market," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 78-88.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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