Apartments simply are big buildings that are for residential use. Just because apartments are huge in terms of size and cost of construction then the estimations on the prices of such bedsits becomes of much interest to us. There are various factors that determine the value of these apartments’ buildings. These factors are determined using various models. Here, samples of statistical data are used analytically in determination of these values.
As mentioned earlier, there are various models that are used to estimate the price of selected samples of apartments. A good example is the Hedonic technique which was used on Portland Oregon apartments. This method simply approximates the value of the economy of an ecosystem service which has a direct impact on the prices of the market. Taking a car as an example to this Hedonic technique, the market value of the car shows its real characteristics. The comfort, elegance, superfluity and the economy on fuel consumption are some of these features that are used to estimate the value of that car. This therefore means that we value the car or other material goods just by taking a look at the amount people are willing to pay for that car or those goods changes with the change in those features. An equation that relates the value of these apartments to characteristics such as facilities, location and capitalization is used in this hedonic method. We can also positively say that this model has been used to expound on 95% on the differences in prices of apartment property.
Participants in real estate markets, stockholders, tax evaluators and appraisers see a very big importance in the estimation of apartment projects. The Hedonic model technique was taken in a case study of Portland Oregon Apartments. In Oregon area, south of river Columbia, during the year 1996-1991, Portland, this model was used to estimate the value of samples of apartment properties.
The Regression Estimates which is a part of this technique was used to estimate these values. The value is a factor of the distance to the epicenter of Portland, the area of space for renting in square footage, the age of the years the project has taken, the amount of payroll in the area code and the average salary in that area. Based on the data obtained from the experiments and analyses from this model, the following can be safely deduced; as you move away from the center of Portland, the less the value of apartment project.
The higher the area of land for renting leads to the increase in value of apartment’s projects. An increase in age of the apartment leads to a reduction in this value. Also of great importance is the neighborhood effect. The increase in business practice in the neighborhoods has the effect of reducing the values of apartments in Portland Oregon area.
These results show that the Hedonic testing technique used on Portland Oregon apartments projects can be used to give a very positive result in evaluating the values of such buildings.