1 The Paper Format

Once you have gathered your claims and supported them with evidence, you need to organize
them into a paper format with which readers of scientific research papers will be familiar. I
will describe the parts of most research papers in the order in which they typically appear in
a technical research paper.

1. Title

Procedures or Methods used to implement Artificial intelligence in Applications.

2. Abstract

The US housing market is currently facing its worst hit in two decades due to the
slowdown in home sales. The hardest hit by this decline are real estate investors and
developers who are currently struggling to make their investments profitable. For these
investors, It is important to assess the current market conditions and forecast their short-
term development to make appropriate financial decisions.

This article presents the development of models based on artificial neural networks to help
real estate investors and developers in this critical task. The article describes the decision
variables, design methodology, and implementation of these models.

These models use historical market performance records to train the artificial neural
networks to predict unexpected future performance. A sample application is analyzed to
demonstrate the model's abilities to analyze and predict market performance. Tests and
validation of the model showed that the forecast error is between -2% and +2%.

3. Introduction

The US housing market is currently in a difficult situation sometimes due to different types
of issues, including past poor lending practices by lenders and concerns about the
Recession. This quarter saw a downward trend in most cases of Real estate market
indicators, including housing market figures, new building permits, the start of construction,
construction home completion, and sale. This slowdown in the real estate market continues
to weigh (on GDP). Real estate investors and property developers are currently being hit the
hardest by the downturn in the housing market They struggle to financially balance their
investments. These investors need to be able to assess the current market situation and
predict its future performance to implement corrective actions and make appropriate
financial decisions as needed.
In this article, Artificial Neural Networks (ANNs) are studied as a decision-support tool that
could help investors predict the performance of the short-term real estate market. The main
assumption here is that the input variables available would be sufficient to predict
performance. The real estate market is represented as a relationship between the average
selling price and the average asking price three months in advance.

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 4. Solution

ANN models are designed as multilayer feed-forward perceptual networks with backward
propagation using Neuro-Solutions. The main reason for choosing this design formulation is
that this type of neural network is considered very robust to get close to almost anyone’s
input/output. Different network structures are formed, crossed, and tested by varying the
number of hidden layers, the number of neurons hidden in each layer, the transfer function,
the learning method, the size of the cross-validation sample, and the testing sample.

The developed models were trained and tested using data that was obtained from the Orland
Regional Realtor Association. These data spanned the last 9 years and included the monthly
sales, the average monthly interest rate, the average median house price, the average list
price, the average sales price, the average number of days a house spends on the market, the
current inventory, and the inventory months’ supply. The data were arranged in columns and
stored in an ASCI input text file to be accessed by the ANN software. The first eight columns
represent the input decision variables and the ninth column represents the desired output

Based on the forecasted ratio between the asking and selling prices, the investor would have
the necessary information to decide whether to sell a house or wait. If the forecasted ratio is
very low, this signifies an expected near drop in the average house selling price over the
short term. In this case, the investor may reduce the asking price slightly to sell a house
quickly to avoid an expected future big drop.

The main variables considered in the design of the ANN models in this study are:

1. The time (Mn, Yr),

2. The average interest rate (i),
3. The percentage change in sales volume compared to the previous year (SlCh),
4. The percentage change in median house price compared to the previous year (MdCh),
5. Average days a house spends on the market (D),
6. The volume of inventory (Inv),
7. The inventory months’ supply (InvT).

These variables are considered the main indicators of the possible change of a house’s
price soon and are represented by eight input neurons in the ANN structure. The output
of the ANN is designed to be the ratio between a house’s selling and asking prices (PrDf).

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 5. About the Question

ANNs are mathematical network-based algorithms that are designed to mimic the neural
system behavior of human beings in making decisions based on generalization ability. ANNs
are trained to recognize the outputs of a system given its inputs. ANNs have been used
extensively as robust tools for estimation and prediction in several research fields including
real estate valuation.

The main objective of this paper is to present the development of ANN models that would
help real estate investors and home developers predict the change in house prices in the
short term. To this end, the present model is designed to provide several unique and practical
capabilities, including:

1. utilizing artificial neural networks to build generalized knowledge about the past and
current performance of the housing industry; and

2. predicting the ratio between house averages sale and asking prices.

6. Discussion and Future Work

The main limitation of the developed model is that it is not intended to predict residential
behavior long-term market. Future work includes training ANN models to predict
performance for 6 and 12 months. However, this requires the use of larger datasets, spanning
multiple decades, to capture real estate market cycle behavior. Including other data such as
sudden stock market fall and other markers can also make the model predict performance in
long run for a bigger period compared to the current model.

7. Conclusion

This post introduced the development of an artificial neural network-based support model
for Real estate investors and real-estate developers in the forecasts of the short-term
evolution of the real estate market. The model uses artificial neural networks, which are
trained using historical datasets of market performance to predict unexpected future
performance. A use case is analyzed to illustrate the use of the model and demonstrates its
ability to effectively analyze and predict the evolution of the real estate market.

8. References