Artificial intelligence in property valuations. An application of artificial neural networks to housing appraisal

In recent years, social, economic and fiscal factors have produced strong modifications of the Italian real estate market, that currently appears as a complex system characterized by continuous transformation. In this context, for real estate operators the use of “slender” tools, able i) to operate even on limited data, ii) to automatically capture from data the causal relations between explanatory variables and prices, iii) to appraisal the market values that will reasonably occur in the short term, has become essential. Among artificial intelligence models, artificial neural networks (ANN) meet these prerogatives. In this paper, ANN is applied to the evaluation of market values of residential properties starting from a sample of apartments recently sold in a neighborhood of the city of Bari (Italy). The excellent results confirm the effectiveness of ANN in property valuations. The work must be attributed in equal parts to the authors.