The Use of a Grid Structure for Reconstructing and Forecasting the Value of Real Estate in Selected Measurement Epochs

Abstract

The absence of sufficiently long time series of data relating to real estate prices in a selected location prevents accurate analyses and the development of precise forecasts that play an important role in a market economy. New methods and solutions are being sought to address this problem. This paper proposes an original method for reconstructing, forecasting and archiving data relating to real estate value. The proposed method involves a GRID (regular square nets) structure and it relies on the prices quoted in successive years (epochs) of measurement in a selected object. Irregularly distributed measurement data (real estate prices) acquired in successive years are transformed into a regular GRID structure to develop digital surface models that describe the distribution of data. The nodes of the GRID structure are described with the coefficients of an approximating polynomial to reconstruct and forecast real estate value in a specific location at any point in time. A GRID structure supports a comparison of changes in real estate value over time in a given node or group of nodes selected from successive measurement epochs. Individual coefficients of an approximating polynomial are generated, allocated to selected nodes, and automatically adapted to local changes in value. As a result, the observed changes can be described in a given period of time. Source data covering multiple epochs are replaced with a single file containing coefficients of approximating polynomials to reduce the size of the stored datasets and facilitate data management.