Real estate crash? After the sub-prime crisis of late 2007, real estate prices fell almost everywhere in the United States. In 2006–2007 before the crisis, the average selling price of homes in a region in upstate New York was

$191,300. A real estate agency wants to know how much the prices have fallen since then. They collect a sample of 1231 homes in the region in mid-2013 and find the average asking price to be $178,613.50 with a standard deviation of $92,701.56. You have been retained by the real estate agency to report on the current situation.

a) Discuss the assumptions and conditions for using t-methods for inference with these data. Here are some plots that may help you decide what to do.

b) What would you report to the real estate agency about the current situation?

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Number of Houses 150 100 50 0 $200,000 $400,000 $600,000 Current Asking Price $800,000