1# RECORD 275ba36694510670b966960c4ff3436b3081cc782# TITLE: Using multiple criteria decision analysis (MCDA) to assist in estimating residential housing values3# YEAR: 2016.0 VENUE: nan DOI: 10.3846/1648715x.2015.11226684# AUTHORS: F. Ferreira; Ronald W. Spahr; Mark A. Sunderman5# PAGES: 17 CANDIDATE TABLE PAGES (1-based): []6# ABSTRACT: Considerable literature exists regarding the complexity of the residential real estate appraisal process and the methods employed to determine initial listing prices as estimates of intrinsic market prices. Deviations in residential real estate intrinsic values occur due to a multiplicity of attributes and explanatory factors requiring consideration. We conduct a panel study using a Multiple Criteria Decision Analysis (MCDA) based framework that utilizes the skills and knowledge of a panel of residential real estate professionals (i.e. appraisers and realtors). We demonstrate how cognitive mapping and the Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH) may assist in estimating appropriate offer/sale prices and strengthening current valuation approaches such as using comparables and/or hedonic modeling. The managerial implications of our MCDA-based framework and some avenues for future research are also presented.789===== PAGE 1 (score 4, numeric-paren 0, table-words 0, var-words 4) =====1011Copyright © 2016 Vilnius Gediminas Technical University (VGTU) Press12http://www.tandfonline.com/tspm13Using Multiple Criteria Decision ANALYSIS (mcda) 14TO ASSIST IN ESTIMATING RESIDENTIAL HOUSING VALUES15Fernando A. F. FERREIRA a,b,*, Ronald W. SPAHR b, Mark A. SUNDERMAN b16a ISCTE Business School, BRU-IUL, University Institute of Lisbon, Avenida das Forças Armadas, 171649–026 Lisbon, Portugal18b Fogelman College of Business and Economics, University of Memphis, Memphis, TN 38152–3120, USA19Received 24 February 2015; accepted 27 July 201520ABSTRACT. Considerable literature exists regarding the complexity of the residential real estate ap-21praisal process and the methods employed to determine initial listing prices as estimates of intrinsic 22market prices. Deviations in residential real estate intrinsic values occur due to a multiplicity of at-23tributes and explanatory factors requiring consideration. We conduct a panel study using a Multiple 24Criteria Decision Analysis (MCDA) based framework that utilizes the skills and knowledge of a panel 25of residential real estate professionals (i.e. appraisers and realtors). We demonstrate how cognitive 26mapping and the Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH) 27may assist in estimating appropriate offer/sale prices and strengthening current valuation approaches 28such as using comparables and/or hedonic modeling. The managerial implications of our MCDA-based 29framework and some avenues for future research are also presented.30KEYWORDS: Decision support; Housing valuation; MCDA; Residential real estate311. INTRODUCTON32Accurately estimating the initial asking/sale price 33for residential real estate is one of the essential 34first steps in facilitating realtors and sellers suc-35cesses in their goal of finding a buyer. Tradition-36ally, the estimation of the appropriate initial ask-37ing price, from which the final sale price is negoti-38ated, has been the responsibility of realtors and 39appraisers. In many cases, even before appraisers 40are asked to determine value, real estate brokers 41and sales associates are asked to establish initial 42listing prices. Thus, it is critical that these real es-43tate professionals understand existing residential 44housing market conditions and the attributes that 45determine individual parcel values. The establish-46ment of a fair listing price is important in facilitat-47ing a timely and mutually beneficial sale.48Much has been written about the appraisal pro-49cess and the methods employed in the establish-50ment of residential real estate initial listing prices. 51Nonetheless, market value estimation for residen-52tial real estate remains a complex undertaking 53(Englund et al. 1998; Fischer 2003). Residential 54real estate intrinsic values deviate due to a variety 55of factors that require consideration in the evalu-56ation process. Thus, despite considerable progress 57to date, each valuation approach has specific limi-58tations requiring further clarification of selected 59criteria and trade-off calculations (Ferreira et al. 602012). Using cognitive maps and multiple criteria 61decision analysis (MCDA), to address valuation 62limitations, may prove effective by incorporating 63multiple perceptions and decision makers into a 64framework for residential real estate valuation.65Methodologically, our MCDA-based framework 66uses cognitive maps and measures attractiveness 67to determine an initial offer/ask price for residen-68tial real estate by applying a categorical-based 69evaluation technique (MACBETH) (Bana e Costa, 70Vansnick 1994; Bana e Costa et al. 2012). MCDA 71may reinforce current valuation approaches such 72as the use of comparable properties or hedonic 73modeling valuation approaches, by potentially re-74ducing omitted criteria and promoting better un-75* Corresponding author. E-mail: fernando.alberto.ferreira@iscte.pt; 76fernando.ferreira@memphis.edu77International Journal of Strategic Property Management78ISSN 1648-715X / eISSN 1648-9179792016 Volume 20(4): 354–370 80doi:10.3846/1648715X.2015.112266881