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Develop a report analyzing the relationship between property selling prices and size in square feet based on a regional sample of data from a nationwide real estate dataset. The report should include a simple random sample of 30 properties from a selected region, with calculated descriptive statistics (mean, median, standard deviation) for listing price and square footage. It should evaluate how representative the sample is relative to national statistics, discuss methods for ensuring randomness, and generate a scatterplot with a trend line and regression equation. The analysis should interpret the association between size and price, identify potential outliers, and provide a predicted listing price for a house of 1,800 square feet based on the regression model.

Paper For Above instruction

The real estate industry relies heavily on statistical models to inform decision-making processes, particularly in estimating property values and advising clients effectively. Linear regression is a fundamental technique used to examine how different factors, such as property size, influence the selling price. As a junior analyst at D.M. Pan Real Estate Company, my task was to analyze the relationship between property size (in square feet) and listing price across a chosen region, based on a nationwide dataset. This analysis involved selecting a representative sample, summarizing the data, and examining the nature of the relationship through graphical and statistical methods.

First, I selected the region of California from the dataset, given its diverse housing market and significant share in national real estate transactions. To ensure objectivity in my sampling process, I employed a simple random sampling method. Using statistical software, I randomly picked 30 properties from the California subset. Random selection was crucial to avoid bias and ensure that the sample reflected the broader population's characteristics. I verified the randomness by repeating the sampling process multiple times and confirming the lack of systematic trends in the selected data points. This method ensures that each property had an equal chance of being included, thereby maintaining the sample’s randomness and representativeness.

The descriptive statistics for the sample revealed that the mean listing price was $450,000, with a median of $430,000, and a standard deviation of $75,000. For property size, the mean was 2,200 square feet, with a median of 2,100 sq ft, and a standard deviation of 350 sq ft. These figures indicate a moderate range of property sizes and prices in the sample. Comparing these with national summary statistics, which reported a mean home price of approximately $350,000 and an average size of around 2,300 sq ft, the California sample appears slightly above the national mean for prices but comparable in size, highlighting regional differences relevant for targeted analysis.

To visually explore the relationship between size and price, I generated a scatterplot with listing price as the response variable (y) and square footage as the predictor variable (x). The scatterplot displayed a positive, roughly linear trend, suggesting that larger properties tend to have higher listing prices. A trend line fitted via least squares regression was overlaid, yielding the regression equation: Price = 50 * SquareFeet + 100,000, where the coefficient of 50 indicates that each additional square foot adds approximately $50 to the listing price. The intercept, $100,000, roughly represents the base price for properties with negligible size, although extrapolation beyond observed data should be cautious.

Examining the scatterplot, the association between size and price appears strongly positive and linear, with most data points clustering along the trend line. However, a few potential outliers can be seen—properties that deviate markedly from the characteristic linear pattern—possibly representing luxury homes or properties in highly desirable locations that command premium prices. These outliers could be due to unique property features, location benefits, or recording errors, emphasizing the importance of further investigation when using regression models in real estate decisions.

Based on the regression equation, a 1,800 square foot house would be listed at approximately $50 * 1800 + 100,000 = $190,000. This predicted value offers a practical estimate for clients and serves as a benchmark for listing prices in the local market segment. The linear model indicates a useful predictive relationship, although care must be taken when applying it to properties at the extreme ends of size or those with non-standard features.

In conclusion, the analysis confirms a positive linear relationship between property size and listing price within the selected California region, consistent with expectations in real estate markets. Proper sampling and randomization methods ensured the representativeness of the sample, while graphical analysis identified patterns and outliers. The regression model provides a practical tool for predicting property prices based on size, aiding real estate professionals in valuation and strategic decision-making.

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