Comparing Var and Artificial Neural Network Model in Forecasting Real Estate Prices during Good and Bad Times

Mateusz Jozko; Konstantinos Vergos

doi:10.20944/preprints202407.2185.v1

Preprint Article Version 1 This version is not peer-reviewed

Version 1 : Received: 26 July 2024 / Approved: 26 July 2024 / Online: 26 July 2024 (12:58:46 CEST)

The financial crisis augmented the need to predict real estate prices. The current study examines the application of Artificial Neural Network (ANN) model and Vector Autoregressive (VAR) model in forecasting real estate prices. The study uses daily observations, which accounted for a total of 2955 observations collected. We found that ANN outperformed significantly the VAR model providing evidence that these models can be used for valuation purposes in the area of real estate and financial markets. These findings are novel and important as they provide evidence of the usefulness of more sophisticated methodologies for market participants and regulators in real estate and financial markets.

Neural networks, Valuation, Real estate, financial markets, VAR, ANN

Business, Economics and Management, Finance

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Comparing Var and Artificial Neural Network Model in Forecasting Real Estate Prices during Good and Bad Times

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