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Confidence Levels

What are Confidence Levels?

Confidence Levels show the accuracy of the model result, relative to the accuracy of an appraisal's forecast. The model's ability to provide actual Forecast Standard Deviation (FSD) of individual model results provides Home Value Explorer® (HVE®) with a very effective measure of accuracy against true value.

When providing a valuation result on a property, HVE provides Confidence Levels (H=high, M=medium, L=low) and FSD in the following ways:

  • High – Confidence Level (H) corresponds to a FSD in use of < 13% (<.130)
  • Medium – Confidence Level (M) corresponds to a FSD in use of > 13% to < 20%. (.200)
  • Low – Confidence Level (L) corresponds to a FSD in use of > 20%.(>.201)

The underlying FSD and Confidence Level are regularly validated with out-of-sample testing. Over 70% of our HVE estimates are high confidence estimates. About 25% of HVE estimates are medium confidence estimates, and less than 5% of HVE estimates are low.

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