Automated Valuation Methods in Atypical Real Estate Markets Using the Mono-parametric Approach

The appraisal objectivity depends on the possibility to quickly and easily access to reliable real estate data in order to apply appropriate appraisal approaches. In order to ensure the objectivity of the real estate appraisals, in recent years Automated Valuation Methods (AVM) have been developed, integrating computerized real estate databases and programming languages. The Automated Valuation Methods proposed at international level usually recur to regression models, aimed to return appraisal equations based on reliable real estate databases. This approach is not applicable in some markets where lack of data does not allow the implementation of regression models. This paper proposes to implement a valuation automatic method in order to appraise properties located in atypical markets, structuring a procedural algorithm based on the mono-parametric approach and able to return punctual values related to the subject's specifics and to the market peculiarities in a very limited area. The paper proposes also the application of similarity degree coefficients in order to take into account the differences between the amounts of the real estate features, leading to the possibility to use the mono-parametric approach also when lack of data would not recommend it.