BACKGROUND

Technical Field

The present invention relates to algorithms and computer processes for grouping properties into neighborhoods.

Description of the Related Art

For various purposes it desirable to group real estate properties into neighborhoods. For example, home price prediction algorithms, such as those implemented by automated valuation models (AVMs), commonly rely on the neighborhood of a home to predict the value of the home.

Several methods are currently used in the industry to define neighborhoods. These methods include the following: (a) grouping properties based on U.S. Census Blocks (public information created by US Census), (b) using Real Estate data or Realtor to define a commonly known neighborhoods, (c) using a group of local residents to define neighborhoods in their city, (d) using a zip codes, and dividing each zip code roughly in half, and (e) using documented “neighborhoods” defined by the City Controller. Unfortunately, these approaches often produce very inconsistent results, and results in which properties of widely ranging characteristics are assigned to the same neighborhood.

