Descriptive Statistics - Real Estate Data Part I Descriptive Statistics - Real Estate Data Part 1 Steve Hill, Desiree Delaloza, Steve Muchuca & Rosa Mercado QNT/ 351 - Team A February 29, 2016 Eugene Hewitt Descriptive Statistics - Real Estate Data Part I Team A has created a spreadsheet based on single family homes located in the city of Bakersfield, CA. Our research reflects property address, listing price, square footage and number of bedrooms for each listing. Descriptive Statistics - Real Estate Data Part I Frequency Distribution List: Descriptive Statistics - Real Estate Data Part I Descriptive Statistics - Real Estate Data Part I Based upon this data we can conclude that the overwhelming majority of homes within Bakersfield are priced within the $2,700 - $500,000\" range. Most homes do not have values even close to ranging within a million dollars. This is substantially different from homes within Los Angeles or Orange County, where most homes start around $700,000. Descriptive Statistics - Real Estate Data Part I Cost of Houses Size of homes in Sq. Ft. Mean $ 292,745 2235 Mode $425,000 556 Median $ 149,950 1440 What we see represented here is the Mean, Mode, and Median for the 100 homes. The three categories are expressed for both price and Square foot per home. When looking at the mean or the average cost over all 100 homes we see that $292,745 is the overall average cost. When looking at the Mode or the most commonly seen price we find that $425,000 is the most common seen price. When looking at the Median or the price of home that sits dead center with 50% being less and 50% being higher, we find $149,950 is the number. Now calculating the same way for square foot of the properties, we find as follows. The mean or the average square foot in the 100 homes is 2,235 overall. Looking at the mode, the most frequent square foot is 556 Sq.Ft. Finally, when looking at the Median where 50% are smaller and 50% are larger we find 1400 Sq. Ft. to be the dead middle. Chebyshev's Theorem is a fact that applies to all possible data sets. It describes the minimum proportion of the measurements that must lie within one, two, or more standard deviations of the mean. It defines that at least 1-1/K2 of data from a sample must fall down within K standard deviations from the mean, where K is any positive real number larger than one. The Probability that x is within k standard deviations of the mean is denoted as: P(|X - | < k) 1 - (1/k2). Using your input of 2 standard deviations of the mean, let's plug in and evaluate: Descriptive Statistics - Real Estate Data Part I P(|X - | < 2) 1 - 1 22 P(|X - | < 2) 1 - 1 4 P(|X - | < k) 1 - 0.25 P(|X - | < k) 0.75 We will use Chebyshev's theorem to find what percentage of the values of the homes will fall between 123 (thousand) and 170 (thousand) for a data set with mean 151 and standard deviation of 14. We first subtract 151-123 and get 28, which tells us that 123 is 28 units below the mean. The second part is subtracting 179-151 and we will also get 28, which tells us that 151 is 28 units above the mean. This tells us that the values between 123 and 179 are all within 28 units of the mean. To find the standard deviation we must divide the number 28 by 14 which gives us 2. This means that they are 2 standard deviations from the mean. So now we must solve for the fraction of the homes that are within the price range we are looking for. We will substitute k for 2 and solve. So, of the data lie between 123 and 179. This also translates to 75% which implies that the data values are 75% between 123 and 179. When it comes to the empirical rule for our observed data of 100 homes which would be located on the x axis, this rule only applies to symmetrical data. About 68% of the values lie within 1 standard deviation of the mean, about 95% of the values lie within 2 standard deviations of the mean, and lastly, about 99.7% of the values lie within 3 standard deviations of the mean. The Empirical Rule is an approximation that applies only to data sets with a bell-shaped relative frequency histogram. It estimates the proportion of the measurements that lie within one, two, and three standard deviations of the mean. The empirical rule is more accurate due to it having Descriptive Statistics - Real Estate Data Part I more information about the shape of the distribution, we can be more certain of our predictions and the percentages are higher than what Chebyshev's Theorem will give us. What we are looking at is a bar graph that displays the number of rooms that are present in the 100 homes we have selected from Bakersfield California. We see that the Mean is 3.5 or to be exact 3.16. this means that the average for all the homes we selected was approximately 3 rooms per house. At the top of each Bar we find the actual count of homes that possessed the corresponding number of rooms. For example, the Bar with #38 falls between 2.25 and 3.5 meaning this represents all homes with three bedrooms. What we see for a middle size family home is that the majority of the houses will be 3 to 4 bedrooms. Some variance to this includes ranch houses or remodels or just earlier developments giving us the one two and six-bedroom house brackets. Descriptive Statistics - Real Estate Data Part I References http://www.entrepreneur.com/article/169332 Basic Finance: An Introduction to Financial Institutions, Investments and Management, 10e / Ch. 27 Real Estate Regression Exercise QNT/351 Version 5 University of Phoenix Material Real Estate Regression Exercise Directions: Use the real estate data you used for your Week 2 learning team assignment. Analyze the data and explain your answers. You are consulting for a large real estate firm. You have been asked to construct a model that can predict listing prices based on square footages for homes in the city you've been researching. You have data on square footages and listing prices for 100 homes. 1. Which variable is the independent variable (x) and which is the dependent variable (y)? 2. Click on any cell. Click on InsertScatterScatter with markers (upper left). To add a trendline, click ToolsLayoutTrendlineLinear Trendline Does the scatterplot indicate observable correlation? If so, does it seem to be strong or weak? In what direction? 3. Click on DataData AnalysisRegressionOK. Highlight your data (including your two headings) and input the correct columns into Input Y Range and Input X Range, respectively. Make sure to check the box entitled \"Labels\". (a) What is the Coefficient of Correlation between square footage and listing price? (b) Does your Coefficient of Correlation seem consistent with your answer to #2 above? Why or why not? (c) What proportion of the variation in listing price is determined by variation in the square footage? What proportion of the variation in listing price is due to other factors? (d) Check the coefficients in your summary output. What is the regression equation relating square footage to listing price? Copyright 2016 by University of Phoenix. All rights reserved. 1 Real Estate Regression Exercise QNT/351 Version 5 (e) Test the significance of the slope. What is your t-value for the slope? Do you conclude that there is no significant relationship between the two variables or do you conclude that there is a significant relationship between the variables? (f) Using the regression equation that you designated in #3(d) above, what is the predicted sales price for a house of 2100 square feet? Copyright 2016 by University of Phoenix. All rights reserved. 2 SINGLE FAMILY HOMES - BAKERSFIELD Property Address 1 1510 Hurrle St., Bakersfield, CA 93308 2 1097 Robinson St., Bakersfield, CA 93305 3 1101 Owens St., Bakersfield, CA 93305 4 1518 Robinson St., Bakersfield, CA 93305 5 1212 Oregon St., Bakersfield, CA 93305 6 1132 Quincy St., Bakersfield, CA 93305 7 2020 Haley St., Bakersfield, CA 93305 8 2700 Mirador Dr., Bakersfield, CA 93305 9 1501 Crestview Dr., Bakersfield, CA 93305 10 1909 Bakers St., Bakersfield,CA 93305 11 2100 North Inyo St., Bakersfield, CA 93305 12 212 Flower St., Bakersfield, CA 93305 13 119 Lincoln St., Bakersfield, CA 93305 14 18 Irene St., Bakersfield, CA 93305 15 3901 Union Ave, 2, Bakersfield, CA 93305 16 117 Loma Linda Dr., Bakersfield, CA 93305 17 109 Columbus St., Bakersfield, CA 93305 18 2505 Lomita Verde Dr., Bakersfield , CA 93305 19 313 Knotts St., Bakersfield, CA 93305 20 7107 Benjie Way, Bakersfield, CA 93313 21 610 6th St., Bakersfield, CA 93304 22 412 9th St., Bakersfield, CA 93304 23 331 E. 3rd St., Bakersfield, CA 93307 24 604 E. 3rd St., Bakersfield, CA 93307 25 1205 Texas St., Bakersfield, CA 93307 26 1424 E 19th St. Bakersfield CA 93307 27 314 Kincaid St. Bakersfield CA 93307 28 109 Griffiths St. Bakersfield CA, 93309 29 708 Vine Dr. Bakersfield, CA 93304 30 2605 Echo Ave Bakersfield, CA 93304 31 2222 S O St. Bakersfield CA 93304 32 106 Washington Avenue, Bakersfield CA 93308 33 1/2 Knotts St, Bakersfield CA 93305 34 815 Lincoln Avenue, Bakersfield CA 93308 35 5257 Sandrini Rd. Bakersfield CA 93307 36 905 Soria Ave. Bakersfield, CA 93309 37 700 Hewlett St. Bakersfield CA 93309 38 8603 Rollingbay Dr. Bakersfield, CA 93312 39 5013 Evanston Ct. Bakersfield, CA 93309 40 8510 Tucana Ave. Bakersfield, CA 93306 41 221 Bloomquist Dr. Bakersfield, CA 93309 42 610 6th St., Bakersfield, CA 93304 43 2222 S O St. Bakersfield CA 93304 44 708 Vine Dr. Bakersfield, CA 93304 45 109 Griffiths St. Bakersfield CA, 93309 46 1424 E 19th St. Bakersfield CA 93307 47 5818 S Fairfax Rd. Bakersfield CA 93305 48 10201 Coram Dr. Bakersfield, CA 93311 49 10600 Granite Rd. Bakersfield CA 93308 50 2902 Cormier Dr. Bakersfield CA 93311 51 Delaney Bakers field, CA 93309 52 River Oaks Bakesfield, CA 93309 53 167 Hickorywood Ln. Bakersfield CA 93308 54 600 Washington Ave, Bakersfield CA 93308 55 4712 Millbrook Way, Bakersfield CA 93313 56 Beechwood Apt 128, Bakersfield CA 93309 57 107 Robinson St, Bakersfield CA 93305 58 1227 Grace St. Bakersfield, CA 93305 59 211 Harding Avenue, Bakersfield, CA 93308 60 506 Woodrow Avenue, Bakersfield, CA 93308 61 627 Edwin Dr. Bakersfield, CA 93308 62 3806 Barbara Avenue Bakersfield, CA 93309 63 407 17th Street. Bakersfield, CA 93301 64 1641 Elm St. Bakersfield, CA 93301 65 6208 Gratz Way, Bakersfield, CA 93306 66 3302 Rio Grande Ln, Bakersfield, CA 93313 67 8533 Rollingbay Dr. Bakersfield, CA 93312 68 5404 Varese, Bakersfield, CA 93308 69 8300 Black Knot Ct. Bakersfield, CA 93311 70 1108 Statkowski Ct. Bakersfield CA 93307 71 5909 Indian Wells Avenue, Bakersfield, CA 93309 72 3718 Kathy Suzanne Way, Bakersfield, CA 93313 73 5016 North Hills Dr. 74 6318 Straub Ln. Bakersfield, CA 93307 75 35301 7th Standard Bakersfield, CA 93314 76 6351 Deacon Ave. Bakersfield, CA 93307 77 18122 Brimhall Rd. Bakersfield, CA 93314 78 11015 Hartland Sr. Bakersfield, CA 93312 79 1639 Kuhio St. Bakersfield, CA 93313 80 10500 Cliffside St. Bakersfield, CA 93311 81 9204 Lake Victoria Rd. Bakersfield, CA93312 82 1209 Bright Water Way Bakersfield, CA 93311 83 9416 Lake Victoria Rd. Bakersfield, CA 93312 84 7508 Live Oak Way Bakersfield, CA 93308 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Listing Price 63,000 65,000 179,950 80,000 119,000 80,000 109,950 109,500 149,000 175,000 99,900 127,900 149,950 159,990 119,000 190,000 160,000 154,950 149,000 79,500 50,000 124,850 75,000 105,000 83,450 $17,500 $20,000 $27,823 $41,270 $39,000 $43,000 $45,000 $45,000 $63,000 $425,000 $110,000 $110,000 $94,630 $85,000 $70,000 $65,000 $50,000 $43,000 $41,270 $27,823 $17,500 $5,000,000 $2,450,000 $1,495,000 $1,398,000 $10,546 $13,433 $16,500 $20,000 $22,500 $24,791 $65,000 $69,000 $69,950 $69,950 $62,500 $199,900 $199,900 $199,900 $199,900 $199,900 $199,977 $200,000 $200,00 $198,000 $198,500 $199,000 $199,000 $199,000 450,200 450,000 450,000 450,000 449,900 449,900 449,900 445,000 445,000 442,900 Square Footage 400 sq. ft. 556 sq. ft. 2168 sq. ft. 1304 sq. ft. 873 sq. ft. not disclosed 1115 sq. ft. 936 sq. ft. 974 sq. ft. 2264 sq. ft. 969 sq. ft. 1189 sq. ft. 1769 sq. ft. 1464 sq. ft. 1279 sq. ft. 1521 sq. ft. 1242 sq. ft. 1036 sq. ft. 1602 sq. ft. 1567 sq. ft. 756 sq. ft. 988 sq. ft. 708 sq. ft. 952 sq. ft. 1118 sq. ft. 1228 sq. ft 952 sq. ft. 912 sq. ft. 704 sq. ft. 781 sq.ft. 1366 sq. ft. 850 sq. ft. 650 sq. ft. 688 sq. ft. 53579 sq. ft. 1579 sq. ft. 1643 sq. ft. 1390 sq. ft. 1165 sq. ft. 1027 sq. ft. 1668 sq. ft. 756 sq. ft. 1366 sq.ft. 704 sq. ft. 912 sq. ft. 1228 sq. ft 1,524,600 sq. ft 8030 sq. ft. 2700 sq. ft 515 sq. ft. 1120 Sq Ft 1079 sq. ft 1440 sq. ft. 1,292 sq. ft 967 sq ft. 528 sq.ft. 556 sq. ft. 959 sq. ft. 936 sq. ft. 702 sq.ft. 600 sq.ft. 2,094 sq.ft. 1965 sq.ft. 1,164 sq ft. 1,834 sq.ft. 1,274 sq.ft. 1,766 sq.ft 2,001 sq. ft. 1,941 sq.ft 1,512 sq.ft. 1,750 sq.ft. 1,922 sq.ft. 2,053 sq.ft. 1,507 sq. ft. 2,899 3,033 1,630 2,357 2,312 2,759 3,469 3,128 3,211 3,217 # of Bedrooms one bed two bd 1 1 2 3 4 3 4 3 3 3 5 3 2 4 4 1 1 3 3 2 5 3 2 2 2 3 3 3 3 3 2 2 4 2 2 2 5 3 3 3 3 3 4 2 4 2 3 3 3 6 3 4 3 2 3 2 2 1 1 2 2 2 2 2 4 3 3 2 3 3 3 4 3 2 4 3 4 4 3 3 4 4 4 4 4 4 4 three bd four bed five bd six bd 2 3 4 3 4 3 3 3 5 3 2 4 4 3 3 2 5 3 2 2 2 3 3 3 3 3 2 2 4 2 2 2 5 3 3 3 3 4 2 4 2 3 3 3 6 3 4 3 2 3 2 2 2 2 2 2 2 4 3 3 2 3 3 3 4 3 2 4 3 4 4 3 3 4 4 4 4 4 4 4 SINGLE FAMILY HOMES - BAKERSFIELD Property Address 85 405 Portway Ct. Bakersfield, CA 93312 86 2010 Wedgemont Pl. Bakersfield, CA 93311 87 6211 Vista Estrella Bakersfield, CA 93306 88 2528 Avenida Escuela Bakersfield, CA 93306 89 2643 South Fairfax Rd. Bakersfield, CA 93307 90 2025 Jewetta Ave. Bakersfield, CA 93312 91 11412 Martinsville Ave Bakersfield, CA 93312 92 14728 Redwood Springs Rd. Bakersfield, CA 93314 93 13828 Rosedale Hwy Bakersfield, CA 93314 94 6718 Aretino Way Bakersfield, CA 93306 95 12409 Longmeadow Way Bakersfield, CA 93312 96 9238 Garrin Rd. Bakersfield, CA 93311 97 11900 April Ann Ave Bakersfield, CA 93312 98 817 Ferdinand Ct. Bakersfield, CA 93309 99 9611 Lake Powell Dr. Bakersfield, CA 93312 100 14124 Edenderry Ave Bakersfield, CA 93314 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Listing Price 440,000 440,000 439,950 435,000 435,000 434,950 434,850 434,500 425,000 425,000 425,000 425,000 424,950 420,000 420,000 419,900 Square Footage 2,573 2,040 2,706 3,177 2,748 2,591 2,668 2,658 1,404 3,449 2,698 2,198 2,600 4,196 3,218 3,024 # of Bedrooms one bed 4 3 5 3 5 5 3 4 3 4 3 4 4 6 4 4 3.16 316 two bd three bd four bed five bd six bd 4 3 5 3 5 5 3 4 3 4 3 4 4 6 4 4 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 Chart Title Column A 0 1 2 3 4 5 6 Column B 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 6 6 1 Changes in Market Equilibrium Week 2 Assignment ECO/365 April 6, 2016 Professor Michael Gay 2 Watch the Khan Academy Video "Changes in Market Equilibrium" located in the Week 1 Khan Academy Videos. Write a 1,050- to 1,400-word paper summarizing the content of the simulation and address the following: Identify two microeconomics and two macroeconomics principles or concepts from the simulation/video. Explain why you have categorized these selected principles or concepts as microeconomics or macroeconomics. Identify at least one shift of the supply curve and one shift of the demand curve in the simulation/video. Explain what causes the shifts, and how each shift affects the price, quantity, and decision making. Include responses to the following: How might you apply what you learned about supply and demand from the simulation/video to your workplace or your understanding of a real-world product with which you are familiar? How do the concepts of microeconomics help you understand the factors that affect shifts in supply and demand on equilibrium price and quantity? How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity? How does the price elasticity of demand affect a consumer's purchasing and the firm's pricing strategy as it relates to the simulation/video? Cite a minimum of 3 peer reviewed sources. Click the Assignment Files tab to submit your assignment. 3 1 Changes in Market Equilibrium Week 2 Assignment ECO/365 April 6, 2016 Professor Michael Gay 2 Watch the Khan Academy Video "Changes in Market Equilibrium" located in the Week 1 Khan Academy Videos. Write a 1,050- to 1,400-word paper summarizing the content of the simulation and address the following: Identify two microeconomics and two macroeconomics principles or concepts from the simulation/video. Explain why you have categorized these selected principles or concepts as microeconomics or macroeconomics. Identify at least one shift of the supply curve and one shift of the demand curve in the simulation/video. Explain what causes the shifts, and how each shift affects the price, quantity, and decision making. Include responses to the following: How might you apply what you learned about supply and demand from the simulation/video to your workplace or your understanding of a real-world product with which you are familiar? How do the concepts of microeconomics help you understand the factors that affect shifts in supply and demand on equilibrium price and quantity? How do the concepts of macroeconomics help you understand the factors that affect shifts in supply and demand on the equilibrium price and quantity? How does the price elasticity of demand affect a consumer's purchasing and the firm's pricing strategy as it relates to the simulation/video? Cite a minimum of 3 peer reviewed sources. Click the Assignment Files tab to submit your assignment. 3