Page 18 - Regression Guideline for AMC
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Understanding regression mechanics
• So far, so good. We have a predicted value for the example property based on MLS characteris6cs and sold prices for a similar set of Orlando proper6es built within a specified range of years and within a proximal geographic range. How accurate is this predic6on?
• To make this determina6on, we first need to understand that the es6mated value produced is called a point es:mate because it consists of a single value or point. However, sta6s6cal modeling is probabilis6c, not “determinis6c”. There is not 100% certainty the regression model point es6mate is the true value. There is only a chance or a probability that the es6mate is the true value of the example property. We want that chance to be very high.
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