In this project I examined a comprehensive housing dataset from the city of Ames in Iowa, USA (source). Homeowners looking to increase the value of their homes often spend too much on remodeling and don't get the return on investment when selling the house. On the other hand, people looking to buy houses want to get the best house possible given a budget. The goal of this project is to address some of these concerns, specifically:
- what features add the most value to a home, and which hurt home values the most?
- given a set of features, what is the expected sale price of a house?
- given a budget, what kind of house would one be able to afford?
To answer these questions, I fitted different linear regression models to the housing data in order to determine the features that are most influential on house price, and those that have the least effect. The performance of the models will be evaluated using the R2 metric, which is a measure of how much the model is able to explain the variance in the dataset.
For house buyers with specific budgets, this model would allow one to figure out what features they would be able to afford given an amount of money. For those looking to invest, houses in the Northridge Heights, Stone Brook, and Northridge neighbourhoods all had higher prices compared to other neighbourhoods. Conversely, people looking to sell their house would be able to use the model to get an estimate of how much they would be able to sell their house for. If one is looking to sell, they should do it sooner rather than later, as the age of the house is one of the biggest contributing factor to the decrease in value. Having a garage in bad condition also negatively affect value, as does having a second floor to the house. And unsurprisingly, if the house is severely damaged, its value drops. As such, those looking to increase the value of their home could consider increasing the square footage of their house, renovating the kitchen and garage, and adding a fireplace.
The model may however have limited applicabilities, as it was developed using data on houses sold between 2006 - 2010 in Ames, USA. This dataset is limited in scope both in terms of the time frame captured, as well as location. The small time frame of four years is not enough to capture any annual changes in sale price that could arise as a result of external factors, such as the current economy. Housing prices at present (in 2019) may also have changed as a result of inflation. The model is also specific to houses in Ames and may not be as accurate when applied to data from another city or country, where house prices may be affected by different things than for example, garage quality.
In reality, house price may be difficult to predict as it is also affected by buyers' psychology, the economic climate, and other factors not included in the present dataset. There will never be a perfect model; the aim of this model is therefore not to give a perfect prediction, but act as a guideline to inform decisions.
SalePrice - the property's sale price in dollars. This is the target variable.
MSSubClass: The building class
20 1-STORY 1946 & NEWER ALL STYLES
30 1-STORY 1945 & OLDER
40 1-STORY W/FINISHED ATTIC ALL AGES
45 1-1/2 STORY - UNFINISHED ALL AGES
50 1-1/2 STORY FINISHED ALL AGES
60 2-STORY 1946 & NEWER
70 2-STORY 1945 & OLDER
75 2-1/2 STORY ALL AGES
80 SPLIT OR MULTI-LEVEL
85 SPLIT FOYER
90 DUPLEX - ALL STYLES AND AGES
120 1-STORY PUD (Planned Unit Development) - 1946 & NEWER
150 1-1/2 STORY PUD - ALL AGES
160 2-STORY PUD - 1946 & NEWER
180 PUD - MULTILEVEL - INCL SPLIT LEV/FOYER
190 2 FAMILY CONVERSION - ALL STYLES AND AGES
MSZoning: Identifies the general zoning classification of the sale.
A Agriculture
C Commercial
FV Floating Village Residential
I Industrial
RH Residential High Density
RL Residential Low Density
RP Residential Low Density Park
RM Residential Medium Density
LotFrontage: Linear feet of street connected to property
LotArea: Lot size in square feet
Street: Type of road access to property
Grvl Gravel
Pave Paved
Alley: Type of alley access to property
Grvl Gravel
Pave Paved
NA No alley access
LotShape: General shape of property
Reg Regular
IR1 Slightly irregular
IR2 Moderately Irregular
IR3 Irregular
LandContour: Flatness of the property
Lvl Near Flat/Level
Bnk Banked - Quick and significant rise from street grade to building
HLS Hillside - Significant slope from side to side
Low Depression
Utilities: Type of utilities available
AllPub All public Utilities (E,G,W,& S)
NoSewr Electricity, Gas, and Water (Septic Tank)
NoSeWa Electricity and Gas Only
ELO Electricity only
LotConfig: Lot configuration
Inside Inside lot
Corner Corner lot
CulDSac Cul-de-sac
FR2 Frontage on 2 sides of property
FR3 Frontage on 3 sides of property
LandSlope: Slope of property
Gtl Gentle slope
Mod Moderate Slope
Sev Severe Slope
Neighborhood: Physical locations within Ames city limits
Blmngtn Bloomington Heights
Blueste Bluestem
BrDale Briardale
BrkSide Brookside
ClearCr Clear Creek
CollgCr College Creek
Crawfor Crawford
Edwards Edwards
Gilbert Gilbert
GrnHill Green Hill
IDOTRR Iowa DOT and Rail Road
MeadowV Meadow Village
Mitchel Mitchell
Names North Ames
NoRidge Northridge
NPkVill Northpark Villa
NridgHt Northridge Heights
NWAmes Northwest Ames
OldTown Old Town
SWISU South & West of Iowa State University
Sawyer Sawyer
SawyerW Sawyer West
Somerst Somerset
StoneBr Stone Brook
Timber Timberland
Veenker Veenker
Condition1: Proximity to main road or railroad
Artery Adjacent to arterial street
Feedr Adjacent to feeder street
Norm Normal
RRNn Within 200' of North-South Railroad
RRAn Adjacent to North-South Railroad
PosN Near positive off-site feature--park, greenbelt, etc.
PosA Adjacent to postive off-site feature
RRNe Within 200' of East-West Railroad
RRAe Adjacent to East-West Railroad
Condition2: Proximity to main road or railroad (if a second is present)
Artery Adjacent to arterial street
Feedr Adjacent to feeder street
Norm Normal
RRNn Within 200' of North-South Railroad
RRAn Adjacent to North-South Railroad
PosN Near positive off-site feature--park, greenbelt, etc.
PosA Adjacent to postive off-site feature
RRNe Within 200' of East-West Railroad
RRAe Adjacent to East-West Railroad
BldgType: Type of dwelling
1Fam Single-family Detached
2FmCon Two-family Conversion; originally built as one-family dwelling
Duplx Duplex
TwnhsE Townhouse End Unit
TwnhsI Townhouse Inside Unit
HouseStyle: Style of dwelling
1Story One story
1.5Fin One and one-half story: 2nd level finished
1.5Unf One and one-half story: 2nd level unfinished
2Story Two story
2.5Fin Two and one-half story: 2nd level finished
2.5Unf Two and one-half story: 2nd level unfinished
SFoyer Split Foyer
SLvl Split Level
OverallQual: Overall material and finish quality
10 Very Excellent
9 Excellent
8 Very Good
7 Good
6 Above Average
5 Average
4 Below Average
3 Fair
2 Poor
1 Very Poor
OverallCond: Overall condition rating
10 Very Excellent
9 Excellent
8 Very Good
7 Good
6 Above Average
5 Average
4 Below Average
3 Fair
2 Poor
1 Very Poor
YearBuilt: Original construction date
YearRemodAdd: Remodel date (same as construction date if no remodeling or additions)
RoofStyle: Type of roof
Flat Flat
Gable Gable
Gambrel Gabrel (Barn)
Hip Hip
Mansard Mansard
Shed Shed
RoofMatl: Roof material
ClyTile Clay or Tile
CompShg Standard (Composite) Shingle
Membran Membrane
Metal Metal
Roll Roll
Tar&Grv Gravel & Tar
WdShake Wood Shakes
WdShngl Wood Shingles
Exterior1st: Exterior covering on house
AsbShng Asbestos Shingles
AsphShn Asphalt Shingles
BrkComm Brick Common
BrkFace Brick Face
CBlock Cinder Block
CemntBd Cement Board
HdBoard Hard Board
ImStucc Imitation Stucco
MetalSd Metal Siding
Other Other
Plywood Plywood
PreCast PreCast
Stone Stone
Stucco Stucco
VinylSd Vinyl Siding
Wd Sdng Wood Siding
WdShing Wood Shingles
Exterior2nd: Exterior covering on house (if more than one material)
AsbShng Asbestos Shingles
AsphShn Asphalt Shingles
BrkComm Brick Common
BrkFace Brick Face
CBlock Cinder Block
CemntBd Cement Board
HdBoard Hard Board
ImStucc Imitation Stucco
MetalSd Metal Siding
Other Other
Plywood Plywood
PreCast PreCast
Stone Stone
Stucco Stucco
VinylSd Vinyl Siding
Wd Sdng Wood Siding
WdShing Wood Shingles
MasVnrType: Masonry veneer type
BrkCmn Brick Common
BrkFace Brick Face
CBlock Cinder Block
None None
Stone Stone
MasVnrArea: Masonry veneer area in square feet
ExterQual: Exterior material quality
Ex Excellent
Gd Good
TA Average/Typical
Fa Fair
Po Poor
ExterCond: Present condition of the material on the exterior
Ex Excellent
Gd Good
TA Average/Typical
Fa Fair
Po Poor
Foundation: Type of foundation
BrkTil Brick & Tile
CBlock Cinder Block
PConc Poured Contrete
Slab Slab
Stone Stone
Wood Wood
BsmtQual: Height of the basement
Ex Excellent (100+ inches)
Gd Good (90-99 inches)
TA Typical (80-89 inches)
Fa Fair (70-79 inches)
Po Poor (<70 inches)
NA No Basement
BsmtCond: General condition of the basement
Ex Excellent
Gd Good
TA Typical - slight dampness allowed
Fa Fair - dampness or some cracking or settling
Po Poor - Severe cracking, settling, or wetness
NA No Basement
BsmtExposure: Walkout or garden level basement walls
Gd Good Exposure
Av Average Exposure (split levels or foyers typically score average or above)
Mn Mimimum Exposure
No No Exposure
NA No Basement
BsmtFinType1: Quality of basement finished area
GLQ Good Living Quarters
ALQ Average Living Quarters
BLQ Below Average Living Quarters
Rec Average Rec Room
LwQ Low Quality
Unf Unfinshed
NA No Basement
BsmtFinSF1: Type 1 finished square feet
BsmtFinType2: Quality of second finished area (if present)
GLQ Good Living Quarters
ALQ Average Living Quarters
BLQ Below Average Living Quarters
Rec Average Rec Room
LwQ Low Quality
Unf Unfinshed
NA No Basement
BsmtFinSF2: Type 2 finished square feet
BsmtUnfSF: Unfinished square feet of basement area
TotalBsmtSF: Total square feet of basement area
Heating: Type of heating
Floor Floor Furnace
GasA Gas forced warm air furnace
GasW Gas hot water or steam heat
Grav Gravity furnace
OthW Hot water or steam heat other than gas
Wall Wall furnace
HeatingQC: Heating quality and condition
Ex Excellent
Gd Good
TA Average/Typical
Fa Fair
Po Poor
CentralAir: Central air conditioning
N No
Y Yes
Electrical: Electrical system
SBrkr Standard Circuit Breakers & Romex
FuseA Fuse Box over 60 AMP and all Romex wiring (Average)
FuseF 60 AMP Fuse Box and mostly Romex wiring (Fair)
FuseP 60 AMP Fuse Box and mostly knob & tube wiring (poor)
Mix Mixed
1stFlrSF: First Floor square feet
2ndFlrSF: Second floor square feet
LowQualFinSF: Low quality finished square feet (all floors)
GrLivArea: Above grade (ground) living area square feet
BsmtFullBath: Basement full bathrooms
BsmtHalfBath: Basement half bathrooms
FullBath: Full bathrooms above grade
HalfBath: Half baths above grade
Bedroom: Number of bedrooms above basement level
Kitchen: Number of kitchens
KitchenQual: Kitchen quality
Ex Excellent
Gd Good
TA Typical/Average
Fa Fair
Po Poor
TotRmsAbvGrd: Total rooms above grade (does not include bathrooms)
Functional: Home functionality rating
Typ Typical Functionality
Min1 Minor Deductions 1
Min2 Minor Deductions 2
Mod Moderate Deductions
Maj1 Major Deductions 1
Maj2 Major Deductions 2
Sev Severely Damaged
Sal Salvage only
Fireplaces: Number of fireplaces
FireplaceQu: Fireplace quality
Ex Excellent - Exceptional Masonry Fireplace
Gd Good - Masonry Fireplace in main level
TA Average - Prefabricated Fireplace in main living area or Masonry Fireplace in basement
Fa Fair - Prefabricated Fireplace in basement
Po Poor - Ben Franklin Stove
NA No Fireplace
GarageType: Garage location
2Types More than one type of garage
Attchd Attached to home
Basment Basement Garage
BuiltIn Built-In (Garage part of house - typically has room above garage)
CarPort Car Port
Detchd Detached from home
NA No Garage
GarageYrBlt: Year garage was built
GarageFinish: Interior finish of the garage
Fin Finished
RFn Rough Finished
Unf Unfinished
NA No Garage
GarageCars: Size of garage in car capacity
GarageArea: Size of garage in square feet
GarageQual: Garage quality
Ex Excellent
Gd Good
TA Typical/Average
Fa Fair
Po Poor
NA No Garage
GarageCond: Garage condition
Ex Excellent
Gd Good
TA Typical/Average
Fa Fair
Po Poor
NA No Garage
PavedDrive: Paved driveway
Y Paved
P Partial Pavement
N Dirt/Gravel
WoodDeckSF: Wood deck area in square feet
OpenPorchSF: Open porch area in square feet
EnclosedPorch: Enclosed porch area in square feet
3SsnPorch: Three season porch area in square feet
ScreenPorch: Screen porch area in square feet
PoolArea: Pool area in square feet
PoolQC: Pool quality
Ex Excellent
Gd Good
TA Average/Typical
Fa Fair
NA No Pool
Fence: Fence quality
GdPrv Good Privacy
MnPrv Minimum Privacy
GdWo Good Wood
MnWw Minimum Wood/Wire
NA No Fence
MiscFeature: Miscellaneous feature not covered in other categories
Elev Elevator
Gar2 2nd Garage (if not described in garage section)
Othr Other
Shed Shed (over 100 SF)
TenC Tennis Court
NA None
MiscVal: $Value of miscellaneous feature
MoSold: Month Sold
YrSold: Year Sold
SaleType: Type of sale
WD Warranty Deed - Conventional
CWD Warranty Deed - Cash
VWD Warranty Deed - VA Loan
New Home just constructed and sold
COD Court Officer Deed/Estate
Con Contract 15% Down payment regular terms
ConLw Contract Low Down payment and low interest
ConLI Contract Low Interest
ConLD Contract Low Down
Oth Other