What is a significant limitation of MRA?

A significant limitation of MRA, or Multiple Regression Analysis, is that it can produce values based on incorrect data. MRA relies heavily on the quality of the input data for its analyses and conclusions. If the data used contains inaccuracies, outliers, or is not representative of the market conditions, then the valuation outputs from MRA can be skewed or misleading. This emphasizes the critical need for thorough data validation and cleaning before conducting any regression analysis.

By recognizing that the reliability of MRA is contingent upon the data quality, stakeholders can understand the importance of ensuring that the dataset accurately reflects the properties being analyzed and the market environment in which they exist. Proper data management is essential to avoid generating valuations that do not reflect the true market value of properties, which can lead to significant implications in mass appraisal practices.