Mass Appraisal Model Building: Constructing the First BLUE-Ready Model (Session 2 / Basic)
Whether you are
launching a valuation start-up, modernizing CAMA systems, or learning mass
appraisal for the first time, high-performance AVMs aren't built on black-box
algorithms—they are built on methodological discipline.
In Session 2,
we transition from raw sampling to active Model Building, executing our
uniform OLS Pipeline on a verified baseline dataset of 6,699
single-family sales.
Key Highlights from Session 2:
·
Administrative
Data Governance:
How to resolve structural multicollinearity by consolidating redundant land-use
and PUD categories into clean binary indicators.
·
Endogenous
Time Indexing:
Capturing market appreciation directly from sale data using a continuous MONTHS
SINCE temporal term—avoiding rigid pre-indexed assumptions.
·
The
Power of Two-Pass Regression: See how auditing standardized residuals (|Z|
> 2.00) and pruning just 4.5% of unrepresentative market noise radically
transforms model diagnostics:
o
Explanatory
Power (R^2):
Bounded from 65.5% up to 81.5%.
o
Precision
(SEE): Compressed error
dispersion by 37.9% (from $62,154 down to $38,612).
o
Residual
Normality:
Collapsed excess Kurtosis from a heavy-tailed 9.6270 down to 0.1676,
achieving true Best Linear Unbiased Estimator (BLUE) status.
We’ve made the Executive Summary
and Methodology Blueprint free for everyone on Substack and Patreon! Paid
subscribers get the full code, matrix specifications, and pre- and post-outlier sales ratio distribution analyses.
Read
the full session here:
https://www.patreon.com/SidSom/posts/basic-mass-model-171049002
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#MassAppraisal #AVM #ModelBuilding #PropTech #Econometrics #OLS #CAMA
#DataScience
