The Nearest Neighbors Appraisal Technique: An Alternative to the Adjustment Grid Methods

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Abstract
This study presents a new appraisal technique, dubbed the Nearest Neighbors Appraisal Technique, which vastly reduces the subjectivity of the traditional adjustment grid methods while eliminating the need to adjust for subject‐comparable differences on a piecemeal basis. Any number of appraisers who apply this technique to the same property at the same point in time will get the exact same estimate of value. The technique avoids piecemeal adjustments by capturing all subject‐comparable differences in a single measure. Using single‐family sales data, the technique is found to be more accurate than any of the adjustment grid methods and hedonic price regression estimation procedures.