Repeat sales index relies on repeat sales of individual properties. Since individual properties have long holding periods, repeat sales index would be least suitable. Hedonic price index relies on transaction data and the regression model explains the variation in transaction prices based on differences between individual properties sold. Appraisal based indices use transaction prices also to estimate value after adjustments for differences. Since there are plenty of transactions, appraisal and hedonic price index have sufficient data to provide good value estimates.
(Study Session 13, LOS 38. K) |
