FSD (forecast standard deviation) is a statistical measure that communicates the projected accuracy of an automated valuation model (AVM) by identifying the percent range an AVM is likely to fall within — it tells the user there is a 68.3% chance of the AVM being within a certain percent of the value. FSD is communicated as a decimal value (e.g., 0.07) or as a percentage (e.g., 7 percent). The lower the FSD, the better the projected quality/accuracy of the AVM.
- Example 1: A property with an AVM value of $100,000 with an FSD of 0.1 has a 68.3% chance of being within the range of +/- 10%: $90,000 to $110,000.
- Example 2: A property with an AVM value of $100,000 with an FSD of 0.2 has a 68.3% chance of being within the range of +/- 20%: $80,000 to $120,000.
Most AVM confidence scores are based on the calculated FSD produced along with the value. This percentage is sometimes turned into a confidence score by subtracting it from 100 percent (e.g., an FSD of 0.07 or 7 percent is a confidence score of 93 percent).
