Statistics, Modeling and Finance

This course provides an in-depth look at statistical analysis, mathematical modeling and the principles of real estate finance. It teaches skills that are appropriate for appraisal of both residential and income producing properties. The primary focus will be on residential applications. The course is structured to conform to the 2008 Real Property Appraiser Qualification Criteria established by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation. It is part of the Required Core Curriculum. Starting with a discussion and examples explaining the importance of statistical analysis for real property appraisers, it progresses through such topics as descriptive and inferential statistics, graphical analysis, measures of central tendency, and measures of dispersion. Then, mathematical and valuation modeling are demonstrated. In this same section, AVM’s are also covered, along with linear regression and multiple regression analysis. The last section will investigate the history of financing and the flow of funds. The role of the Federal Reserve System will be explored, along with how mortgages work. There will be extensive analysis of mortgage types, terms, and calculations showing the effects of changes in terms of payment patterns. An HP 12C calculator will be required for this course. Keystroke solutions will be provided throughout the course for the many statistical and financial problems employed. There is a required 60-minute exam at the end that must be taken in a proctored setting.

1. Relate instances in which statistics can be helpful to appraisers
2. Distinguish between descriptive and inferential statistics.
3. Describe graphic analysis
4. Perform basic functions on an HP 12C calculator
5. Calculate a mean
6. Calculate a median.
7. Define a mode
8. Summarize the characteristics of each of the three measures
9. Describe sampling techniques
10. Define and illustrate a range
11. Calculate an average deviation
12. Calculate a standard deviation
13. Describe the characteristics of a normal distribution
14. Describe and illustrate inferential statistics
15. Calculate areas under a normal curve
16. Describe the use of a coefficient of determination
17. Demonstrate linear regression
18. Describe and illustrate mass appraisals
19. Define and illustrate AVM’s
20. Be familiar with the supply and demand for money
21. Be familiar with sources of capital
22. Summarize the functions of the Federal Reserve Board
23. Describe the workings of the secondary mortgage market
24. Describe various kinds of creative financing
25. Describe and illustrate compounding and discounting
26. Calculate the Six Functions of a Dollar with the 12C calculator
27. Calculate mortgage payments
28. Create an amortization table
29. Calculate a balloon payment
30. Calculate the market value of a loan