MAXIMAL SALE PROBABILITY CRITERION USING FOR PRIMARY MARKET INFORMATION DATA SELECTION

Abstract

The primary market information selection principles of the economic measurements implementation using the compared sales/market data methodical approach are considered. According to the proposed approach, by the maximal sale probability criterion, the comparative objects set is treated as a primary data set, which with certain accuracy reproduces the unit value appropriate to the selection objects. Real estate market modern conditions are analyzed. The concrete definition and particularization necessity of selection, verification and systematization of primary market information data evaluation procedures is substantiated. It is shown that requirements to primary market information data selection are highly influenced on the appraising accuracy and obtained real estate objects cost result reliability level. Some recommendations for alternative primary market information data selection criteria application are set, within the limits of existent real estate valuation/appraising normative and methodical base.

The features of the offered primary market information data selection criteria are considered for the balanced and unbalanced markets conditions. In particular, according to the maximal sale probability criterion is offered, is recommended to use the lower part of the selection objects unit value ranked series range only, during primary market information data selection procedure performed. As a result of the of the real estate market conditions analysis, presented in a period of financial and economic crisis development, the next conclusion is justified: most of published in media and special professional periodical editions offered to sale real estate objects costs data can not be use as an indicator of it’s market unit value. The main reason is the supply and demand balance on a real estate market is distorted, and selection objects unit value ranked series range middle and overhead part data does not represent the correlation with the real demand level during a crisis period. They reflect only market operators economically overpriced unwarranted expectations, which are oriented on pre-crisis period level of real estate objects prices. And here are not taking into account the real estate market activity decrease and reduced consumer demand. The maximal sale probability criterion set forth in the article and offered recommendations for the comparative objects selection provide for forming the selection objects unit value ranked series range representative sample using comparative objects prices, which are located under probability distribution center and are less than the mathematical expectation value. Thus authors conception is based on the empirically validated pre-condition, that for enough numeral comparative objects selection the unit value ranked series range law of probability distribution is normal or close to normal.

The possibilities of the economic measurements error, introduced by the comparative objects primary market information data selection principles influence, reducing was substantiated. Some practical recommendations for the evaluation results accuracy and reliability increasing are formulated.