What is the main purpose of property valuation models?

The main purpose of property valuation models is to predict market value. These models use statistical techniques and historical data to estimate the worth of a property in the current market. By analyzing various factors such as location, property characteristics, and recent sales, valuation models help assessors, appraisers, and property tax officials determine a property’s fair market value.

Predicting market value is crucial for multiple stakeholders, including buyers, sellers, investors, and governmental bodies. Accurate valuations are essential in guiding real estate transactions, ensuring that property taxes are fairly assessed based on current market conditions, and providing insights for investment decisions. Hence, the use of property valuation models is predominantly focused on predicting market value to support these functions accurately.