Study On The Improvement Of Market Approach In Real Estate Valuation

With the continuous development of Chinese economy and society, the real estate market is increasingly prosperous, the real estate industry has become the pillar industry of national economy, and the prices of real estate is relevant to national economy and people’s livelihood. Since real estate is relatively easy to produce the bubble economy, financial risk, and greatly influenced by national economic policies such as state macro-control, it becomes a heated research topic to make an assessment fairly and reasonably on the value of real estate market. In the valuation of real estate, the market approach is one of the simplest, the most direct, and the most commonly used method in the real estate appraisal method system, because its evaluation principle is easier to understand than others and the most important thing is to directly reflect the market situation of real estate in the evaluation process. Therefore, a market valuation has become the mainstream of the real estate appraisal market. However, there are some problems existing in practice, such as subjectivity in comparable instance selection and factor revising, and roughness of determining final evaluation results, which not only make the appraisal result unreliable, but also lead to moral hazard to a large extent, and is not beneficial to the specification and development of the whole real estate appraisal market. So it is a worthy issue of study to evaluate real estate using market approach in a scientific way.Above all, this paper theoretically does in-depth research relating to prices of real estate, concept and fundamental of real estate evaluation, and analyzes both the main theoretical basis of market approach in real estate appraisal and the main existing problems in practice. Afterwards, improvement research of market approach is caused by problems, the paper puts forward the set pair analysis method through the establishment of connection degree model. The method of adjusting factors turns to quantitative analysis from subjective judgment. Analytic hierarchy process(AHP) is introduced in determining weights. And in the final assessment of prices, close to the degree of model which joins the fuzzy mathematics principle replaces the simple arithmetic average method. Finally, taking one home as an example, the paper demonstrates the application of the improved market approach in real estate appraisal and analyzes each step, to make market approach play a greater advantage in real estate appraisal and provide better services in real estate appraisal industry.