Determinants of Residential Property values in the Las Vegas Metropolitan Area (Use the data File: Housing)
The Greater Las Vegas Association of Realtors® (GLVAR) is interested in analyzing the determinants of residential property values in the Las Vegas Metropolitan Area housing market. The data set is based on the 2015 residential properties of the Las Vegas Metropolitan Area. Residential property values (PRICE) are explained by a number of factors. The relationship between price and these factors is written as:
PRICE =f(SQFT, BED, BATH, AGE, POOL, FORECLOS)
PRICE = Sale price of residential property
SQFT = Square feet, measuring the size of living space
BED = Number of bedrooms
BATH = Number of bathrooms
AGE = Year of the residential property
POOL = 1 if the property has a pool or a spa and 0 if not.
FORECLOS = 1 if property is a foreclosed property and 0 if not
Part I: Characteristics of residential properties
- Construct a table that includes the summary statistics (mean, standard deviation, minimum and maximum) of all the variables. Explain briefly your findings.
- Compute the matrix of correlation coefficients for the variables PRICE, SQFT, BED, BATH, AGE, POOL, and FORECLOS. Analyze the direction and strength of the relationship of the right-hand side variables (SQFT, BED, BATH, AGE, POOL, and FORECLOS) on PRICE. Explain your findings.
- Show the scatter plots of the relationships between (i) PRICE and SQFT, (ii) PRICE and BED, (iii) PRICE and BATH, and (iii) PRICE and AGE (Use PRICE as the variable on the vertical axis in each plot). Explain your findings. Are the results of the plots consistent with the correlation results in (2)? Explain.
Part II: Comparing characteristics of foreclosed and non-foreclosed home
Is there a difference in values between foreclosed and non-foreclosed residential properties? Compute the average difference in values of the two types of properties. Explain your findings. Are your findings consistent with intuition? Explain.
Table: Descriptive Statistics (Average Values)
Variables Foreclosed Non-foreclosed Difference
Part III: Policy recommendation
The Greater Las Vegas Association of Realtors® (GLVAR) likes your study and requests that you draft a useful policy for the Association with regard to housing market condition in Las Vegas. Your recommendation should be based essentially on the data and results of this project.