It is a beautiful day here on Avalon, a Catalina Island city. I am here to appraise the home of a lovely couple that will donate the home to a museum. I am finished with the inspection, and the boat to go home leaves in several hours. So I am studying multiple regression.
This is a tool I use as a Real Estate Appraiser that analyses large amounts of data to measure the probability of contributors to a home's value. This essential tool gives appraisers like me objective computerized estimates of what is drives value in an area.
Some people may assume that a value estimate (also known as an Appraisal) comes from an appraiser's head. That might have been the old way of doing things. Still, today we measure and compare what buyers and sellers agree is a valued contributor. Since each house is somewhat unique, it is best to find how buyers and sellers value a home and its features. See the regression below.
The graph indicates how the price per square foot affects the value. Various factors, such as a view or a pool, will impact a home value and where it falls (above or below) on the median regression line.
Wait, I think I hear the boat horn that tells me I better get on it, or I'll be left behind on the island!!