Methodology of discrete spatial-parametric real estate market modelling

This paper gives a formalized description of the procedure for constructing widely used discrete spatial-parametric models of the real estate market in terms of set theory – an apparatus specially created for describing discrete spaces. The presentation is carried out in comparison with the approaches and concepts of a related methodology - regression models of mass appraisal of real estate objects. The methodology of discrete spatial-parametric modeling of the real estate market is used for market monitoring, for building dynamic market indices and for mass appraisal of real estate objects. The methodology is based on statistical cluster analysis and also allows for static interpolation spatial-parametric forecasting of the values of market indicators in small clusters with insufficient sample size and in narrow markets with little or no supply. The application of the methodology of discrete spatial-parametric modeling of the real estate market is demonstrated on the example of the residential real estate market in Moscow.