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HOUSING PRICE
PREDICTION
Data Science
Bao Tram Duong
INTRODUCTION
01
● The real estate industry plays an integral part in the U.S. economy.
● It is now stands at $33.6 trillion, which is equal to the combined
GDP of the U.S. and China, the two largest economies of the world.
● Purchasing and selling a house is among the biggest commitments
and a great source of income for most people. Therefore, accurate
prediction of prices based on sale data can be a critical tool to
assist the buyer/seller in making an informed decision.
● King County
● Located in the U.S. state of
Washington.
● The most populous county in
Washington and the 12th-most
populous in the U.S.
● 21,597 listings from May 2014 to
May 2015
Data
Source
Grade
Condition
Square Footage
Location
Bedrooms
Bathrooms
Floors
Renovation
Age
Waterfront
Basement
Home
Features
What are the most predictive features to predict the price of a home?
How to increase the value of a home?
01
02
Business
Statement
How does age affect the value of a home?
03
METHODOLOGY
02
● Perform EDA to understand the insight of the data.
● Create the prediction model with the highest accuracy that is able
to accurately estimate the price of the house given the features.
● Outcome: By cross-referencing our initial EDA and the model
coefficients:
■ Predict the price of house accurately
■ Insights on what to look for when buying a new home
■ What to do to improve your current home’s value
What are the most
predictive features to
predict the price of a home?
01
Accuracy
78%
Location
Waterfront
SQFT Above Basement
Renovation
Condition
How to increase the value of a home?
02
Data Science vs. The Real Estate in King County, Washington
SQFT
Livable
Space
Condition
Grade
03
How does age affect the
value of a home?
Renovation
ACTIONABLE INSIGHTS
03
Age
● Renovation
● Improve condition &
grade
Location
● Waterfront
● Neighbors
Grade: 8 and above
Square Footage of Livable Space
● Bedrooms
● Bathrooms
● Floors
Condition: 3 and above
Renovation
● Basement
OTHER FACTORS
04
● The quality of local schools
● Employment opportunities
● Proximity to shopping, entertainment, and common services
such as hospitals
● Proximity to highways, utility lines, and public transit
● Proximity to the nearest major city
How hot (or cold) is the area’s real estate market?
When is the best time to buy or sell?
T H A N K Y O U
Q & A
APPENDIX
Accuracy
59%
Accuracy
77%
Coef
Coef
Coef
SQFT
15
Neighbors
Waterfront
Bedrooms
Bathrooms
Floors
Basement
Renovation
Grade
Condition
Condition
1 = Poor - Worn out.
2 = Fair - Badly worn.
3 = Average
4 = Good
5 = Very Good
Grade 1-3 = Falls short of minimum building
standards.
4 = Generally older, low quality construction.
Does not meet code.
5 = Low construction costs and workmanship.
Small, simple design.
6 = Lowest grade currently meeting building
code. Low quality materials and simple designs.
7 = Average grade of construction and design.
8 = Just above average in construction and
design.
9 = Better architectural design with extra
interior and exterior design and quality.
10 = High quality features.
11 = Custom design and higher quality finish
work with added amenities.
12 = Custom design and excellent builders.
13 = Generally custom designed and built.
Age
Location

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Data Science vs. The Real Estate in King County, Washington