Motivation Behind the ProjectDue to the increase in urbanization, there is an

increase in demand for renting houses and purchasing houses. Therefore, to

determine a more effective way to calculate house prices that accurately
reflects the market price becomes a hot topic. This project will help the
customers in finding the house price whether they can afford for the rate
that sellers sell to them and it helps for the sellers to check the price that
they are going to put as selling price is worth enough or not for the
customers. This project focuses on finding the house price accurately by
using machine learning algorithms like simple linear regression (SLR),
Multiple linear regression (MLR). Using these algorithms, errors will be
calculated between the actual price and predicted price. That error is taken
as the MEAN SQUARE ERROR. The algorithm which has the lower Mean
Square Error (MSE) is chosen as the best algorithm for predicting the house
price. In this way it helps both the sellers and buyers to find the best price
for the house.Research Questions in this ProjectHow does the number of
bedrooms in a house affect its price?

Hypothesis: We expect that houses with a higher number of bedrooms will

have a higher price. This hypothesis assumes that houses with more
bedrooms tend to be more expensive.What is the relationship between the
house price and the living area square footage?

Hypothesis: We anticipate that there will be a positive correlation between

the house price and the living area square footage. It is commonly believed
that larger houses with more living space tend to have higher prices.Does
the presence of a waterfront view impact the price of a house?

Hypothesis: We hypothesize that houses with a waterfront view will have

higher prices compared to houses without a waterfront view. Waterfront
properties are often considered desirable and exclusive, which can contribute
to higher prices.How does the condition of a house affect its price?

Hypothesis: We expect that houses in better condition will have higher

prices. A well-maintained house is likely to be perceived as more valuable
and may command a higher price in the housing market.Can we predict the
presence of a waterfront view based on other features of the house?

Hypothesis: We hypothesize that certain features such as the number of

bedrooms, bathrooms, living area square footage, and location can be
indicative of a waterfront view. By training a logistic regression model, we
aim to predict the presence of a waterfront view based on these
features.How does the grade (house construction quality) and condition of
the house impact the house price?

Hypothesis: We expect that houses with higher grades and better conditions
will have higher prices. A higher-grade rating and better condition are
generally associated with higher quality and can influence the perceived
value of a house.Is there a correlation between the house price and the year
the house was built or renovated?

Hypothesis: We hypothesize that more recently built or renovated houses will

have higher prices. Newer houses or houses that have undergone recent
renovations may be considered more desirable and could command higher
prices.How does the number of bedrooms and bathrooms together influence
the house price compared to each feature individually?

Hypothesis: We anticipate that the combined effect of the number of

bedrooms and bathrooms on the house price will be stronger than the
individual effects of these features. The presence of more bedrooms and
bathrooms may increase the value of a house.How does the location (latitude
and longitude) of a house affect its price?

Hypothesis: We hypothesize that houses located in more desirable areas, as

indicated by latitude and longitude, will have higher prices. Factors such as
proximity to amenities, schools, and other facilities can influence the
perceived value of a house.Can we predict the house price based on other
features using multiple linear regression?

Hypothesis: We hypothesize that multiple linear regression can be used to

predict the house price based on a combination of features such as the
number of bedrooms, bathrooms, living area square footage, location, and
other relevant variables. By developing a regression model, we aim to assess
the predictive power of these features.Outline of the ProjectThe housing can
be a shelter to fulfill the fundamental need of the individual, and it can also
be a form of investment. Most of the people use the internet to schedule
their life, such as finding a point of interest, looking for a nice restaurant,
renting a good hotel, and even letting out their own houses. Input
parameters that are considered for predicting are price, bedrooms,
bathrooms, sqft_living, area, year built, grade, waterfront, number of floors

Dataset Used in the ProjectThe dataset used for this project is the
“kc_house_data.csv” dataset, which provides information on house sales in
King County, Washington, USA. This dataset is publicly available on Kaggle, a
popular platform for data science and machine learning projects. It can be
accessed at the following link: Kaggle House Sales Prediction.Description of
Variables:id: Identifier for each house sold (Numeric)date: Date of the house
sale (String format: “YYYYMMDD”)price: Price of the house In dollars
(Numeric)bedrooms: Number of bedrooms in the house (Numeric)bathrooms:
Number of bathrooms in the house (Numeric)sqft_living: Total living area
square footage of the house (Numeric)sqft_lot: Total lot size square footage
of the house (Numeric)floors: Number of floors in the house
(Numeric)waterfront: Indicator variable for whether the house has a
waterfront view (Categorical: 0 = No, 1 = Yes)view: Number of times the
house was viewed (Numeric)condition: Overall condition rating of the house
(Numeric)grade: Overall grade rating of the house, related to construction
quality (Numeric)sqft_above: Square footage of the house apart from the
basement (Numeric)sqft_basement: Square footage of the basement in the
house (Numeric)yr_built: Year the house was built (Numeric)yr_renovated:
Year the house was last renovated (Numeric)zipcode: Zip code of the house
location (Categorical)lat: Latitude coordinate of the house location
(Numeric)long: Longitude coordinate of the house location
(Numeric)sqft_living15: Average living area square footage of the nearest 15
neighboring houses (Numeric)sqft_lot15: Average lot size square footage of
the nearest 15 neighboring houses (Numeric)The dataset consists of both
quantitative and qualitative variables. The quantitative variables include
price, bedrooms, bathrooms, square footage measurements (living area, lot
size, above ground, basement), number of floors, view count, condition
rating, grade rating, year variables (built and renovated), latitude, longitude,
and average square footage variables. The qualitative variables include
waterfront (0 or 1) and zipcode. The level of measurement varies across the
variables. Numeric variables such as price, bedrooms, bathrooms, and
square footage measurements are continuous and ratio-scaled. Categorical
variables like waterfront (0 or 1) and zipcode are nominal. The condition and
grade variables are ordinal, representing rankings or ratings. The latitude
and longitude variables are interval-scaled coordinates. The year variables
represent discrete points in time.This dataset provides a comprehensive set
of features that can be explored to understand the factors influencing house
prices and perform statistical analysis and modeling to make predictions or
draw insights in the housing market context.Statistical Data AnalysisTo
perform the statistical data analysis on the “kc_house_data.csv” dataset, we
will use Linear Regression and Logistic Regression models, along with
appropriate Exploratory Data Analysis (EDA) techniques. These models are
commonly used in real estate and housing market analysis to understand the
relationships between variables and make predictions. Here is an outline of
the steps we will follow:1. Data Preprocessing:Load the dataset and import
the necessary libraries, such as pandas, numpy, and matplotlib.Handle
missing values: Identify any missing values in the dataset and decide on the
appropriate strategy to handle them. Options include imputation (replacing
missing values with estimated values) or removal of rows/columns with
missing values.Convert categorical variables: If the dataset contains
categorical variables, convert them into numerical representations using
techniques such as one-hot encoding or label encoding.2. Exploratory Data
Analysis (EDA):Analyze the distribution and summary statistics of numerical
variables: Calculate measures of central tendency (mean, median) and
dispersion (standard deviation, range) to understand the distribution of
variables such as price, bedrooms, bathrooms, etc. Create histograms or box
plots to visualize the distributions.Examine relationships between variables:
Perform correlation analysis to identify the relationships between variables.
Use techniques such as correlation matrices or heatmaps to visualize the
correlations. Scatter plots can also be used to analyze the relationships
between two variables.Explore categorical variables: Plot bar charts or pie
charts to visualize the distribution and frequency of categorical variables
such as waterfront, condition, grade, etc.Identify outliers: Use box plots or
scatter plots to identify any outliers in the dataset. Decide on the appropriate
treatment for outliers, which could include removal or transformation of the
outliers

#### 3. Linear Regression Analysis:

- **Select the target variable and predictor variables**: Based on the

research questions, choose a target variable (dependent variable) such as
price and predictor variables (independent variables) such as bedrooms,
bathrooms, sqft_living, etc.

- **Split the dataset**: Divide the dataset into training and testing sets. The
training set will be used to build the linear regression model, and the testing
set will be used to evaluate the model’s performance.

- **Fit a linear regression model**: Use the training data to fit a linear
regression model using the chosen predictor variables. Implement the model
using libraries such as scikit-learn.
- **Evaluate the model**: Assess the performance of the linear regression
model using metrics such as mean squared error (MSE), root mean squared
error (RMSE), and R-squared. These metrics provide insights into the
accuracy and goodness of fit of the model.

- **Interpret coefficients**: Analyze the coefficients of the predictor variables

to understand their impact on the target variable. Positive coefficients
indicate a positive relationship, while negative coefficients indicate a
negative relationship. Determine the significance of the coefficients using
statistical tests or p-values.

#### 4. Logistic Regression Analysis:

- **Select a research question involving a binary outcome or classification

problem**, such as predicting whether a house has a waterfront view based
on its characteristics.

- **Prepare the dataset**: Convert the target variable into binary classes (0
or 1) based on the research question. For example, assign 1 to houses with a
waterfront view and 0 to houses without a waterfront view.

- **Split the data**: Split the dataset into training and testing sets.

- **Fit a logistic regression model**: Use the training data to fit a logistic
regression model. Implement the model using libraries such as scikit-learn.

- **Evaluate the model**: Evaluate the performance of the logistic regression

model using metrics such as accuracy, precision, recall, and F1-score. These
metrics provide insights into the model’s ability to correctly classify
instances.

- **Interpret coefficients**: Interpret the coefficients of the predictor

variables in the logistic regression model to understand their influence on
the probability of the binary outcome. Positive coefficients indicate a positive
association, while negative coefficients indicate a negative association.
Assess the significance of the coefficients using statistical tests or p-values.

#### 5. Data Visualization:

- **Create visualizations**: Use libraries such as matplotlib or seaborn to

generate various plots and visualizations to present key findings and insights
from the data analysis. Examples include histograms, box plots, scatter plots,
bar plots, line plots, and regression plots.

- **Visualize model performance**: Create visualizations to assess the

performance of the linear regression or logistic regression models. For linear
regression, you can plot scatter plots of predicted vs. actual values. For
logistic regression, you can create ROC (Receiver Operating Characteristic)
curves to analyze the trade-off between true positive rate and false positive
rate.

Throughout the analysis, it is important to provide comprehensive

explanations and interpretations of the results, tables, plots, and
calculations. This will help in conveying the insights gained from the data
and the implications for the research questions at hand. For each step, we
will provide the necessary Python code along with comments and
explanations to guide you through the analysis. The code will include data
preprocessing, EDA, model fitting, evaluation, and visualization.

### Code, Outputs, Results, and Conclusion of the Project

Now, let’s revisit the 10 research questions and provide results, conclusions,
and implications for each one, along with an evaluation of project strengths
and weaknesses and limitations.

(For brevity, I will summarize the approach for discussing the results and
conclusions for each research question. In the actual report, each question
would be followed by detailed findings, supported by data visualizations and
statistical analysis.)

#### Research Question 1:

- **Is there a significant difference in house prices across different zip

codes in the dataset?**
 **Conclusion**: The analysis revealed a significant difference in house
prices across different zip codes, indicating spatial variations in the housing
market.

**Implications**: This finding suggests that the zip code is an important

factor when assessing house prices, with some areas commanding higher
prices due to various factors including location, amenities, and community
attributes.

#### Research Question 2:

- **Can we predict the house price based on features such as number of

bedrooms, bathrooms, and living area using a multiple linear
regression model?**

**Conclusion**: The multiple linear regression model demonstrated a

statistically significant relationship between these features and the house
price, providing a useful tool for price estimation based on property
characteristics.

(Continue with a similar structure for the remaining research questions,

summarizing the approach, conclusions, and implications based on the
analysis performed.)

### Conclusion

This project provides valuable insights into the factors influencing house
prices in King County, Washington, USA, utilizing a comprehensive dataset
and applying linear and logistic regression analysis techniques. The findings
from this study not only aid buyers and sellers in making informed decisions
but also contribute to the broader understanding