Review of clustering methods used in data-driven housing market segmentation

Abstract

There was already a huge effort spent to prove the existence of housing market segments, how to utilize them to improve valuation accuracy, and gain knowledge about the inner structure of the whole superior housing market. Accordingly, many different methods on the topic were explored, but there is still no universal framework known. The aim of this article is to review some previous studies on data-driven housing market segmentation methods with a focus on clustering methods and their ability to capture market segments with respect to the shape of clusters, fuzziness, and hierarchical structure.There was already a huge effort spent to prove the existence of housing market segments, how to utilize them to improve valuation accuracy, and gain knowledge about the inner structure of the whole superior housing market. Accordingly, many different methods on the topic were explored, but there is still no universal framework known. The aim of this article is to review some previous studies on data-driven housing market segmentation methods with a focus on clustering methods and their ability to capture market segments with respect to the shape of clusters, fuzziness, and hierarchical structure.