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MAT 240 Module Three Assignment

The document presents a housing price prediction model for D.M. Pan National Real Estate Company, highlighting key statistics such as an average listing price of $326,947 and a strong positive correlation (r = 0.96) between square footage and listing price. The regression equation indicates that for every additional square foot, the price increases by approximately $148.80, and about 92.19% of price changes can be explained by the size of the home. The model is most reliable for homes between 1,100 and 3,000 square feet, beyond which predictions may be less accurate.

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3 views

MAT 240 Module Three Assignment

The document presents a housing price prediction model for D.M. Pan National Real Estate Company, highlighting key statistics such as an average listing price of $326,947 and a strong positive correlation (r = 0.96) between square footage and listing price. The regression equation indicates that for every additional square foot, the price increases by approximately $148.80, and about 92.19% of price changes can be explained by the size of the home. The model is most reliable for homes between 1,100 and 3,000 square feet, beyond which predictions may be less accurate.

Uploaded by

lfallon0423
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Housing Price Prediction Model for D.M. Pan National Real Estate Company

Department of Math, Southern New Hampshire University

MAT 240: Applied Statistics


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Housing Price Prediction Model for D.M. Pan National Real Estate Company

Module Two Notes

The average listing price in my sample was $326,947, the median was $297,850, and the

standard deviation was $118391.7248. For square footage, the average was 1,859 sq ft, the

median was 1,742 sq ft, and the standard deviation was 763.9416 sq ft.

Regression Equation

My regression equation is: y=148.8x + 50304

Determine r

The correlation coefficient (r) shows both the strength and direction of the relationship

between two variables. In this case, the coefficient of determination (r²) is 0.9219, which means

the correlation coefficient (r) is about 0.96 after taking the square root. Since r falls between 0.8

and 1, that tells us there’s a strong relationship between the variables. The positive value of r also

means the slope goes upward from left to right, pointing to a positive correlation—basically, as

one variable increases, so does the other. So, if X goes up, Y goes up too. In simpler terms,

there’s a positive relationship between the square footage of a property and its list price, the more

space, the higher the price.

Examine the Slope and Intercepts

On average, the price of a home goes up with every additional square foot. Based on the

slope of the line, the price increases by about $148.80 per square foot. The intercept is 50,304,

but since there weren’t any land-only listings in the area I looked at, there’s no data for homes

with square footage close to zero—so the intercept doesn’t really have a meaningful

interpretation in this case.


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R-squared Coefficient

R-squared (r²) basically tells us how well the line from the regression fits the data. In this

case, the R-squared value is 0.9219, which means about 92.19% of the changes in listing prices

can be explained by the size of the home. That’s a pretty strong connection, showing that square

footage plays a big role in how much a home is listed for. The other 7.81% is likely due to things

the model doesn’t include—like location, condition, or upgrades.

Conclusions

Based on the data I pulled; there’s a clear and strong positive relationship between square

footage and listing price—bigger homes tend to come with higher price tags. The average home

in my sample was about 1,859 square feet, which seems a bit smaller compared to the national

summary data (2,111 square feet). So, homes in this region might be a bit more modest in size

overall.

Using the slope from my regression equation, which is $148.80, we can say that for every

additional 100 square feet, the price increases by about $14,880. That gives a pretty good idea of

how size impacts price in this area—small changes in square footage can mean big shifts in

price.

As for where the regression model is most reliable, I’d say the graph is best used within

the typical range of homes in the dataset—probably somewhere between 1,100 and 3,000 square

feet. That’s where we have data, and where the relationship between size and price holds up the

best. Beyond that range, things could get less predictable, especially with luxury homes or very

small properties that weren’t represented in the sample.

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