Research on real estate pricing methods based on data mining and machine learning
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S.I. : SPIOT 2020
Research on real estate pricing methods based on data mining and machine learning Yanliang Yu1 • Jingfu Lu2 • Dan Shen3 • Binbing Chen4 Received: 11 August 2020 / Accepted: 26 October 2020 Ó Springer-Verlag London Ltd., part of Springer Nature 2020
Abstract This paper aims to study the actual utility of real estate pricing models based on data mining and machine learning. In order to achieve this goal, this paper introduces appropriate trend estimation methods, adjusts pricing models and processes, and realizes trend estimation that changes over time to make the resulting pricing model have advantages such as dynamics, accuracy, and flexibility over the original model. Moreover, this paper proposes a real estate pricing model based on the quadratic exponential smoothing time-varying trend estimation. In addition, this paper uses the quadratic exponential smoothing method to calculate the index trend in the random process of the house price index, and performs segmentation processing on the pricing model according to the index cycle, so as to obtain the real estate pricing method under the timevarying trend. Finally, this paper adjusts the volatility parameters and the mean recovery rate to time-varying piecewise functions, uses the quadratic variation to calculate the volatility parameters and the martingale valuation method to calculate the mean recovery rate parameters, and establishes the real estate pricing model of the time-varying O–U process. Case studies show that the model constructed in this paper has good performance and has certain practical effects. Keywords Data mining Machine learning Real estate Pricing method
1 Introduction The main reasons why the real estate industry can become a pillar industry of the national economy are as follows: The first is the needs of residents who live and work in peace. For thousands of years, the demand for living and working in peace in Chinese traditional culture has kept the real estate industry in a state of strong demand. Secondly, the development of the real estate industry is not only its own contribution to the national economy, but the development of real estate will also drive the development of
& Jingfu Lu [email protected] 1
School of Business, Yango University, Fuzhou 350000, China
2
School of Economics and Management, South China Normal University, Guangzhou 510006, China
3
College of Biological and Agricultural Engineering, Jilin University, Changchun 130000, China
4
Jiangxi University of Science and Technology, Ganzhou 341000, China
industries such as the steel industry, metallurgy, and chemical industry, which is linked. Finally, the real estate industry has its own characteristics of long construction period and huge investment amount, which makes it has its unique position in the national economy. As a kind of investment with special status, real estate investment has the following three main characteristics: (1) Flexibility: The so-called flexibility means that the i
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