February 10, 2021

Valuation models and approaches for Computer Assisted Mass Appraisals.

For purposes of property assessment, market value is generally calculated through mass appraisal methods. Mass appraisal is the process of valuing a group of properties as of a given date and using common data, standardized methods, and statistical testing.

A Computer Assisted Mass Appraisal (CAMA) system is an automated system for maintaining property data, valuing property, notifying owners, and ensuring tax equity through uniform valuations. CAMAs are used to streamline the usage of limited resources and complete the valuation process in time.

Learn more about Computer Assisted Mass Appraisal Systems here.

CAMA systems depend on complete, up-to-date and correct data to mass appraise. Know all about property data collection and maintenance here.


Once data is collected, mass appraisal analysis begins by assigning properties to use classes or strata based on highest and best use (normally current use for residential property). The highest and best use of property is the reasonable and probable use that supports the highest present value as of the date of appraisal. (Some statutes require to be valued at current use regardless of highest and best use. Zoning and other land use controls normally dictate highest and best use of vacant land.) Generally, the components used by an assessor to analyze highest and best use of the land are - legally permissible, physically possible, appropriately supported, and financially feasible. They result in the highest value.

Valuation Models

All appraisals, whether single property or mass, use a model. A model is a representation of the relationship between value and variables representing factors of supply and demand. Mass appraisal models represent the market for a specific type of property in a specified area. Supply and demand factors and property features influence value. Careful and extensive market analysis is required for both specification and calibration of a model that estimates values accurately.

Valuation models are developed for defined property groups. It is particularly effective when housing types and styles are relatively uniform within areas. Separate models are developed for each market area. Single residential models suffice in smaller jurisdictions. What type of property do you own? Know all about the valuation approach used to mass appraise your property.

Mass appraisal models apply to all three approaches to value: the cost approach, the sales comparison approach, and the income approach.

The Cost Approach

It is applicable to virtually all improved parcels and has the potential to produce accurate valuations. It is extremely reliable when standard materials, design, and workmanship are used. It calculates the value of the fee simple interest in a property. All this approach requires is reliable cost data (complete, current, correct data). Current construction costs should be based on the cost of replacing a structure with one of equal utility, using current materials, design, and building standards. Cost of individual construction components and building items in order to adjust for features that differ from base specifications are also to be included. Construction costs should be updated before each assessment cycle.
Once incorporated into a construction cost manual and related computer software, it can perform the valuation function.


Estimating land value and depreciating assets is the most difficult aspect of the cost approach. These estimates must be based on non-cost data (primarily sales) and can involve significant subjectivity.
Determining accurate land value is another challenge, as they must be extracted from sales of improved property.
Construction costs should be updated before each assessment cycle.

The Sales Comparison Approach

This approach analyzes the sale prices of similar properties to estimate the value of a subject property. It is the most preferred method for estimating values for residential and other property types with adequate sales. Learn more here

The sales comparison approach applies direct market models and comparable sales algorithms. Comparable sales algorithms resemble single-property appraisal systems. They are familiar and can compensate for less well-specified models, as the models are used only to adjust the selected comparables.

Direct market models depend more heavily on careful model specification and calibration. The same model is directly applied against all properties in the model area, resulting in efficiency and consistency.


Comparable sales algorithms can be problematic if the selected comparables are not well validated or representative of market value.
Direct market models depend more heavily on careful model specification and calibration. Sales ratio statistics will be biased if sales used in the ratio study are used as comparables for themselves in model development.

The Income Approach

When reliable income and expense data, income multipliers, and overall rates are available for income-producing properties, this is the preferred method.

Data collection and processing is the first step in applying to mass appraisals. Normal or typical gross incomes, vacancy rates, net incomes, and expense ratios for various homogeneous strata of properties are then computed. These figures are useful to estimate the income and expenses for individual parcels with unreported data, and judge the reasonableness of reported data.
Models can also be developed using actual income and expense data from a sample of properties and calibrated by using multiple regression analysis. The developed income figures can be capitalized into estimates of value in a number of ways when good sales and income data are available. Where sales are insufficient, market participants and relevant publications can be consulted.


Successful application of the income approach requires the collection, maintenance, and careful analysis of income and expense data.

What land valuation models are applied to mass appraise what type of property?

Learn more about the model applicable to property you own here.

Valuation models and approaches for CAMA

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