Example: Sale Prices for Houses
Contents
10.5. Example: Sale Prices for Houses¶
In this final section, we carry out an exploratory analysis using the ideas from this chapter to guide our investigations help us understand the visualizations that we make. Although EDA typically begins in the data wrangling stage, for demonstration purposes the data we work with in this section have already been partially cleaned so that we can focus on exploring the features of interest. Note also that we will not discuss creating the visualizations in much detail; that topic is covered in the Data Visualization chapter.
First, we consider the scope of the data (see Chapter 2 for more on scope).
Scope. These data were scraped from the San Francisco Chronicle (SFChron) Website. The SFChron published weekly data on the sale of houses in the San Francisco Bay Area. The data are a census of homes sold during this time. That is, the population consists of all sales of houses from Apr 2003 to December 2008. Since we are working with a census, the population matches the access frame and the sample consists of the entire population.
Granularity. Each record represents a sale of a home in the SF Bay Area during the above specified time period. This means that if a home was sold twice during this time, then it will have two records in the dataset. And, if a home in the Bay Area was not sold during this time, then it will not appear in the dataset.
File Type. When we inspect the data file sfhousing.csv
with CLI tools
(see Section X), we find that there are over 500,000 rows in the dataset and
that the file indeed consists of comma-separated-values.
# The file has 521494 lines
!wc data/sfhousing.csv
521494 2801383 47630469 data/sfhousing.csv
# The file is 45M large, which is reasonable to read into pandas
!du -shH data/sfhousing.csv
45M data/sfhousing.csv
!head -n 4 data/sfhousing.csv
county,city,zip,street,price,br,lsqft,bsqft,year,date,datesold
Alameda County,Alameda,94501,1001 Post Street,689000,4,4484,1982,1950,2004-08-29,NA
Alameda County,Alameda,94501,1001 Santa Clara Avenue,880000,7,5914,3866,1995,2005-11-06,NA
Alameda County,Alameda,94501,1001 Shoreline Drive \#102,393000,2,39353,1360,1970,2003-09-21,NA
With this, we expect that we can read the file into a DataFrame:
# Some rows in the csv have extra commas, but since there are only a few, we
# drop them when reading in the data.
sfh_all = pd.read_csv('data/sfhousing.csv', error_bad_lines=False)
sfh_all
b'Skipping line 30550: expected 11 fields, saw 12\n'
b'Skipping line 343819: expected 11 fields, saw 12\n'
county | city | zip | street | ... | bsqft | year | date | datesold | |
---|---|---|---|---|---|---|---|---|---|
0 | Alameda County | Alameda | 94501.00 | 1001 Post Street | ... | 1982.00 | 1950.00 | 2004-08-29 | NaN |
1 | Alameda County | Alameda | 94501.00 | 1001 Santa Clara Avenue | ... | 3866.00 | 1995.00 | 2005-11-06 | NaN |
2 | Alameda County | Alameda | 94501.00 | 1001 Shoreline Drive \#102 | ... | 1360.00 | 1970.00 | 2003-09-21 | NaN |
3 | Alameda County | Alameda | 94501.00 | 1001 Shoreline Drive \#108 | ... | 1360.00 | 1970.00 | 2004-09-05 | NaN |
... | ... | ... | ... | ... | ... | ... | ... | ... | ... |
521487 | Sonoma County | Windsor | 95492.00 | 9992 Wallace Way | ... | 1158.00 | 1993.00 | 2005-05-15 | NaN |
521488 | Sonoma County | Windsor | 95492.00 | 9998 Blasi Drive | ... | NaN | NaN | 2008-02-17 | NaN |
521489 | Sonoma County | Windsor | 95492.00 | 9999 Blasi Drive | ... | NaN | NaN | 2008-02-17 | NaN |
521490 | Sonoma County | Windsor | 95492.00 | 999 Gemini Drive | ... | 1092.00 | 1973.00 | 2003-09-21 | NaN |
521491 rows × 11 columns
Feature Types. This dataset does not have an accompanying codebook, but we can determine the features and their types by inspection.
sfh_all.info()
<class 'pandas.core.frame.DataFrame'>
RangeIndex: 521491 entries, 0 to 521490
Data columns (total 11 columns):
# Column Non-Null Count Dtype
--- ------ -------------- -----
0 county 521491 non-null object
1 city 521491 non-null object
2 zip 521462 non-null float64
3 street 521479 non-null object
4 price 521491 non-null float64
5 br 421343 non-null float64
6 lsqft 435207 non-null float64
7 bsqft 444465 non-null float64
8 year 433840 non-null float64
9 date 521491 non-null object
10 datesold 52102 non-null object
dtypes: float64(6), object(5)
memory usage: 43.8+ MB
Based on the names of the fields, we expect the primary key to consist of the combination of county, city, zip, street address, and date (if the house was sold more than once in the time period).
Sale price is our focus in this investigation so we begin by examining it. To develop your intuition about distributions, make a guess about the shape of the sale price distribution.
10.5.1. Understanding Price¶
A starting guess is that the distribution is highly skewed to the right with a few expensive houses sold. The summary statistics shown below confirm this skewness. The median is closer to the lower quartile than to the upper quartile. Also the maximum is more than 40 times as large as the median.
# This option stops scientific notation for pandas
pd.set_option('display.float_format', '{:.2f}'.format)
display_df(sfh_all[['price']].describe(), rows=8)
price | |
---|---|
count | 521491.00 |
mean | 635443.11 |
std | 393968.53 |
min | 22000.00 |
25% | 410000.00 |
50% | 555000.00 |
75% | 744000.00 |
max | 20000000.00 |
We might ask whether that $20m sale price is simply an anomalous value or whether there are many houses that sold at such a high price. We can zoom in on the right tail of the distribution and compute a few high percentiles.
percs = [95, 97, 98, 99, 99.5, 99.9]
prices = np.percentile(sfh_all['price'], percs, interpolation='lower')
pd.DataFrame({'price': prices}, index=percs)
price | |
---|---|
95.00 | 1295000.00 |
97.00 | 1508000.00 |
98.00 | 1707000.00 |
99.00 | 2110000.00 |
99.50 | 2600000.00 |
99.90 | 3950000.00 |
We see that \(99.9\%\) of the houses sold for under \(\$4M\) so the \(\$20M\) sale is indeed a rarity. Let’s examine the histogram of sale prices below \(\$4M\). Fewer than 1 in 1,000 sales exceeded \(\$4M\). Is the distribution skewed?
under_4m = sfh_all[sfh_all['price'] < 4_000_000]
sns.histplot(data=under_4m, x='price', binwidth=100000)
<AxesSubplot:xlabel='price', ylabel='Count'>

We can confirm that the sale price, even without the top 0.1%, remains highly skewed to the right, with a single mode around $1m. Next, we plot the histogram of the logarithm transformed sale price, which is roughly symmetric:
log_prices = under_4m.assign(log_price=np.log10(under_4m['price']))
sns.histplot(data=log_prices, x='log_price', binwidth=0.1)
<AxesSubplot:xlabel='log_price', ylabel='Count'>

10.5.2. What Next?¶
Now that we have an understanding of the distribution of sale price, let’s consider the so-what questions posed in the previous section. Why might the data shape matter? Do you have reason to expect that subgroups of the data have different distributions? What comparison might bring added value to the investigation?
An initial attempt to answer the first question is that models and statistics based on symmetric distributions tend to have more robust and stable properties than for highly skewed distributions. We address this issue more in the modeling sections of the book. For this reason, we primarily work with the log-transformed sale price. And, we might also choose to limit our analysis to sale prices under $6m since the super-expensive houses may behave quite differently.
To begin to answer the second and third questions, we turn to our knowledge of the housing market in this time period. Sale prices for houses rose rapidly in the mid ’00s, and then the bottom fell out of the market (Reference). For this reason, the distribution of sale price in, say, 2004, might be quite different than in 2008, right before the crash. To explore this further we can examine the behavior of prices over time. Or we can fix time, and examine the relationships between price and the other features of interest, essentially controlling for a time effect. Both approaches are potentially worthwhile, and we proceed with both.
Another factor to consider is location. You may have heard the expression: There are three things that matter in property: location, location, location. Comparing price across cities might bring added value to our investigation.
One approach to EDA is to narrow our focus. In this way we can control for particular features, such as time. We do this by first limiting the data to sales made in one calendar year, 2004, so rising prices should have a limited impact on the distributions and relationships that we examine. To limit the influence of the very expensive and large houses, we also restrict ourselves to sales below $4m and houses smaller than 12,000 ft^2. This subset still contains large and expensive houses, but not outrageously so. Later, we further restrict our exploration to a few cities of interest.
def subset(df):
return df.loc[(df['price'] < 4_000_000) &
(df['bsqft'] < 12_000)]
sfh = sfh_all.pipe(subset)
sfh
county | city | zip | street | ... | bsqft | year | date | datesold | |
---|---|---|---|---|---|---|---|---|---|
0 | Alameda County | Alameda | 94501.00 | 1001 Post Street | ... | 1982.00 | 1950.00 | 2004-08-29 | NaN |
1 | Alameda County | Alameda | 94501.00 | 1001 Santa Clara Avenue | ... | 3866.00 | 1995.00 | 2005-11-06 | NaN |
2 | Alameda County | Alameda | 94501.00 | 1001 Shoreline Drive \#102 | ... | 1360.00 | 1970.00 | 2003-09-21 | NaN |
... | ... | ... | ... | ... | ... | ... | ... | ... | ... |
521484 | Sonoma County | Windsor | 95492.00 | 998 Polaris Drive | ... | 1196.00 | 1973.00 | 2007-08-05 | NaN |
521487 | Sonoma County | Windsor | 95492.00 | 9992 Wallace Way | ... | 1158.00 | 1993.00 | 2005-05-15 | NaN |
521490 | Sonoma County | Windsor | 95492.00 | 999 Gemini Drive | ... | 1092.00 | 1973.00 | 2003-09-21 | NaN |
443935 rows × 11 columns
For this subset, the shape of the distribution of sale price remains the same—price is still highly skewed to the right. We continue to work with this subset to address the question: Are there any potentially important features to create comparisons with/against?
10.5.3. Examining other features¶
In addition to the date of the sale and the location of the house, which we identified earlier, as features of interest, a few other features that might be important to our investigation are the size of the house, lot (or property) size, and number of bedrooms. We explore the distributions of these features and their relationship to sale price.
What might we expect the distributions of building and lot size look like?
Since the size of the property is likely related to its price, it seems reasonable to guess that these features are also skewed to the right. The cell below shows the distribution of building size (on the left), and we confirm our intuition. The distribution is unimodal with a peak at about 1500 ft^2, and many houses are over 2,500 ft^2 in size. The log-transformed building size is nearly symmetric, although it maintains a slight skew. The same is the case for the distribution of lot size.
fig, (ax1, ax2) = plt.subplots(ncols=2, figsize=(10, 4))
sns.histplot(data=sfh, x='bsqft', binwidth=200, ax=ax1)
ax1.set_xlabel('Building size (ft^2)')
log_bsq = sfh.assign(log_bsqft=np.log10(sfh['bsqft']))
sns.histplot(data=log_bsq, x='log_bsqft', binwidth=0.05, ax=ax2)
ax2.set_xlabel('Building size (ft^2, log10)')
plt.tight_layout()

What might the relationship between building and property size look like?
Given they are both skewed distributions, we will want to plot the points on log scale. In the next cell, the scatter plot on the left is in the original units and it is difficult to discern the relationship because of the skewness of the two distributions. Most of the points are crowded into the bottom left of the plotting region. The scatterplot on the right reveals a few interesting features: there is a horizontal line along the bottom of the scatter plot where it appears that many houses have the same lot size no matter the building size; and there appears to be a slight positive log-log linear association between lot and building size.
fig, (ax1, ax2) = plt.subplots(ncols=2, figsize=(10, 4))
sns.scatterplot(data=sfh, x='bsqft', y='lsqft',
alpha=0.1, s=20, ax=ax1)
loglog = sfh.assign(log_bsqft=np.log10(sfh['bsqft']),
log_lsqft=np.log10(sfh['lsqft']))
sns.scatterplot(data=loglog, x='log_bsqft', y='log_lsqft',
alpha=0.1, s=20, ax=ax2)
plt.tight_layout()

Let’s look at some lower quantiles of lot size to try and figure out this value:
percs = [0.5, 1, 1.5, 2, 2.5, 3]
lots = np.percentile(sfh['lsqft'].dropna(), percs, interpolation='lower')
pd.DataFrame({'lot_size': lots}, index=percs)
lot_size | |
---|---|
0.50 | 436.00 |
1.00 | 436.00 |
1.50 | 436.00 |
2.00 | 612.00 |
2.50 | 791.00 |
3.00 | 871.00 |
We found something interesting! About 1.5% of the houses have a lot size of 436 ft^2. What does 436 mean? This is an avenue of investigation worth pursuing which we’ve left as an exercise to the reader.
Another measure of house size is the number of bedrooms. Since this is a discrete quantitative variable, we can treat it as a qualitative feature and make a bar plot. What do you expect this distribution to look like?
Houses in the Bay Area tend to be on the smaller side so we venture to guess that the distribution will have a peak at three and skewed to the right with a few houses having 5 or 6 bedrooms.
In the following cell, the bar plot confirms that we generally had the right idea. However, we find that there are some houses with as many as 60 bedrooms!
plt.figure(figsize=(12, 2))
sns.countplot(data=sfh, x='br')
plt.xticks(rotation=45);

We transform the number of bedrooms into an ordinal feature by reassigning all values larger than 8 to 8+, and recreate the bar plot for the transformed data. We can see that even lumping all of the houses together with 8+ bedrooms, they do not amount to many. With this transformation, the rest of the distribution is easier to see. The distribution is nearly symmetric with a peak at 3, nearly the same proportion of houses have 2 or 4 bedrooms, and nearly the same have 1 or 5. There is asymmetry present with a few houses having 6 or more bedrooms.
eight_up = sfh.loc[sfh['br'] >= 8, 'br'].unique()
new_bed = sfh['br'].replace(eight_up, 8)
sns.countplot(data=sfh.assign(br=new_bed), x='br')
<AxesSubplot:xlabel='br', ylabel='count'>

In EDA, we should also investigate relationships between features and explore relationships between pairs of variables for different subgroups. As mentioned in the ch:eda_guidelines section, we examine the distribution of a feature across subgroups to look for unusual observations in pairs of features and within subgroups. For example, we found the unusual value of 436 ft^2 for lot size, and saw that this small lot size appeared for many building sizes.
Before we proceed, we’ll save the transformations done thus far into sfh
.
def log_vals(sfh):
return sfh.assign(log_price=np.log10(sfh['price']),
log_bsqft=np.log10(sfh['bsqft']),
log_lsqft=np.log10(sfh['lsqft']))
def clip_br(sfh):
eight_up = sfh.loc[sfh['br'] >= 8, 'br'].unique()
new_bed = sfh['br'].replace(eight_up, 8)
return sfh.assign(br=new_bed)
sfh = (sfh_all
.pipe(subset)
.pipe(log_vals)
.pipe(clip_br)
)
sfh
county | city | zip | street | ... | datesold | log_price | log_bsqft | log_lsqft | |
---|---|---|---|---|---|---|---|---|---|
0 | Alameda County | Alameda | 94501.00 | 1001 Post Street | ... | NaN | 5.84 | 3.30 | 3.65 |
1 | Alameda County | Alameda | 94501.00 | 1001 Santa Clara Avenue | ... | NaN | 5.94 | 3.59 | 3.77 |
2 | Alameda County | Alameda | 94501.00 | 1001 Shoreline Drive \#102 | ... | NaN | 5.59 | 3.13 | 4.59 |
... | ... | ... | ... | ... | ... | ... | ... | ... | ... |
521484 | Sonoma County | Windsor | 95492.00 | 998 Polaris Drive | ... | NaN | 5.54 | 3.08 | 3.91 |
521487 | Sonoma County | Windsor | 95492.00 | 9992 Wallace Way | ... | NaN | 5.64 | 3.06 | 3.79 |
521490 | Sonoma County | Windsor | 95492.00 | 999 Gemini Drive | ... | NaN | 5.51 | 3.04 | 3.89 |
443935 rows × 14 columns
10.5.4. Delving Deeper into Relationships¶
We begin by examining how the distribution of price changes for houses with different numbers of bedrooms. The box plot in the following cell shows that the median sale price increases with the number of bedrooms from 1 to 5 bedrooms, and for the largest houses (those with 6, 7, and 8+ bedrooms), there is nearly the same distribution of log-transformed sale price.
sns.boxplot(data=sfh, x='br', y='log_price');

We would expect that houses with one bedroom are smaller than houses with, say, 4 bedrooms. We might also guess that houses with 6 or more bedrooms are similar in size. To dive deeper, we consider the normalization (a kind of transformation) that divides price by building size to give us the price per square foot. Is this constant for all houses, in other words, is price primarily determined by its size and does the relationship between size and price stay the same across different sizes of house?
The following cell creates two scatter plots. The one on the left shows price against the building size (both log-transformed), and the plot on the right shows price per square foot (log-transformed) against building size and colors the points according to the number of bedrooms in the house. In addition, each plot has an added smooth curve that reflects the local average price or price per square foot) for buildings of roughly the same size. What do you see?
from statsmodels.nonparametric.smoothers_lowess import lowess
color1 = sns.color_palette()[1]
color2 = sns.color_palette()[2]
fig, (ax1, ax2) = plt.subplots(ncols=2, figsize=(10, 4))
sns.scatterplot(data=sfh, x='log_bsqft', y='log_price',
alpha=0.1, s=20, ax=ax1)
xs = np.linspace(2.5, 4, 100)
curve = lowess(sfh['log_price'], sfh['log_bsqft'], frac=1/10,
xvals=xs, return_sorted=False)
ax1.plot(xs, curve, color=color1, linewidth=3)
ppsf = sfh.assign(
ppsf=sfh['price'] / sfh['bsqft'],
log_ppsf=lambda df: np.log10(df['ppsf']))
sns.scatterplot(data=ppsf, x='bsqft', y='log_ppsf',
hue='br', legend=False,
alpha=0.05, s=20, ax=ax2)
xs = np.linspace(200, 6_000, 100)
curve = lowess(ppsf['log_ppsf'], ppsf['bsqft'], frac=1/10,
xvals=xs, return_sorted=False)
ax2.plot(xs, curve, color=color2, linewidth=3)
plt.tight_layout()

The lefthand plot shows what we expect—larger houses cost more. We also see that there is roughly a log-log-linear association.
The righthand plot in this figure is interestingly nonlinear. We see that smaller houses cost more per square foot than larger ones, and the price per square foot for larger houses (houses with many bedrooms) is relatively flat.
We mentioned earlier that we also want to consider location. There are house sales from over 150 different cities in this dataset. Some cities have a handful of sales and others have thousands. We narrow down the the dataset further and examine relationships for a few cities.
Before we proceed, we’ll save the price per square foot transforms into sfh
:
def compute_ppsf(sfh):
return sfh.assign(
ppsf=sfh['price'] / sfh['bsqft'],
log_ppsf=lambda df: np.log10(df['ppsf']))
sfh = (sfh_all
.pipe(subset)
.pipe(log_vals)
.pipe(clip_br)
.pipe(compute_ppsf)
)
sfh.head(2)
county | city | zip | street | ... | log_bsqft | log_lsqft | ppsf | log_ppsf | |
---|---|---|---|---|---|---|---|---|---|
0 | Alameda County | Alameda | 94501.00 | 1001 Post Street | ... | 3.30 | 3.65 | 347.63 | 2.54 |
1 | Alameda County | Alameda | 94501.00 | 1001 Santa Clara Avenue | ... | 3.59 | 3.77 | 227.63 | 2.36 |
2 rows × 16 columns
10.5.5. Fixing Time and Location¶
We examine data for some cities in the East Bay: Richmond, El Cerrito, Albany, Berkeley, Walnut Creek, Lamorinda (which is a combination of Lafayette, Moraga, and Orinda, three neighboring bedroom communities), and Piedmont. We start by combining cities to create Lamorinda:
def make_lamorinda(sfh):
return sfh.replace({
'city': {
'Lafayette': 'Lamorinda',
'Moraga': 'Lamorinda',
'Orinda': 'Lamorinda',
}
})
sfh = (sfh_all
.pipe(subset)
.pipe(log_vals)
.pipe(clip_br)
.pipe(compute_ppsf)
.pipe(make_lamorinda)
)
sfh.head(2)
county | city | zip | street | ... | log_bsqft | log_lsqft | ppsf | log_ppsf | |
---|---|---|---|---|---|---|---|---|---|
0 | Alameda County | Alameda | 94501.00 | 1001 Post Street | ... | 3.30 | 3.65 | 347.63 | 2.54 |
1 | Alameda County | Alameda | 94501.00 | 1001 Santa Clara Avenue | ... | 3.59 | 3.77 | 227.63 | 2.36 |
2 rows × 16 columns
The following box plot of log sale price for these cities shows that Lamorinda and Piedmont tend to have more expensive homes and Richmond has the least expensive, but there is overlap in sale price for all areas.
cities = ['Richmond', 'El Cerrito', 'Albany', 'Berkeley',
'Walnut Creek', 'Lamorinda', 'Piedmont']
sns.boxplot(data=sfh.query('city in @cities'),
x='city', y='log_price')
plt.xticks(rotation=45);

Next, we’ll make a plot showing the log price per ft^2 against the building size. How does this plot help you think about the importance of location to home value?
four_cities = ['Berkeley', 'Lamorinda', 'Piedmont', 'Richmond']
sns.lmplot(data=sfh.query('city in @four_cities'),
x='bsqft', y='log_ppsf', hue='city',
scatter_kws={'s': 20, 'alpha': 0.1},
ci=False);

The relationship between price per square foot and building size is roughly log-linear with a negative association for each of the four locations. While, not parallel, it does appear that there is a “location” boost for houses, regardless of size, where, say, a house in Berkeley costs about $250 more per square foot than a house in Richmond. We also see that Piedmont and Lamorinda are more expensive cities, and in both cities, there is not the same reduction in price per square foot for larger houses in comparison to smaller ones.
In EDA, we often revisit earlier plots to check whether new findings add insights in previous settings. We will keep our EDA brief, and next consider the time element.
10.5.6. Changes Over Time¶
For our final exploration, we return to the full dataset with all sales and examine price over time. With time, we often make line plots to examine typical change in price over time. Since our earlier explorations showed us that price is a highly skewed distribution, we will want to work with percentiles, rather than averages. And, since we would like to compare the trends in time for different priced houses, we make line plots for the 10th, 30th, 50th, 70th, and 90th percentiles in sale price. These line plots are relative to the price in April 2003 so they all begin at 1. (A value of 1.5 for the 90th percentile in 2006 indicates a sale price that is 1.5 times the 90th percentile in April, 2003.)
def parse_dates(sfh):
dates = pd.to_datetime(sfh['date'], infer_datetime_format=True)
return sfh.assign(date=dates).set_index('date')
percs = [10, 30, 50, 70, 90]
def find_percentiles(series):
prices = np.percentile(series, percs, interpolation='lower')
return pd.Series(prices, index=percs)
monthly_percentiles = (sfh_all
.pipe(parse_dates)
.resample('M')
['price']
.apply(find_percentiles)
.reset_index()
.rename(columns={'level_1': 'percentile'})
)
monthly_percentiles
date | percentile | price | |
---|---|---|---|
0 | 2003-04-30 | 10 | 255000.00 |
1 | 2003-04-30 | 30 | 340000.00 |
2 | 2003-04-30 | 50 | 421000.00 |
... | ... | ... | ... |
337 | 2008-11-30 | 50 | 365000.00 |
338 | 2008-11-30 | 70 | 515000.00 |
339 | 2008-11-30 | 90 | 841500.00 |
340 rows × 3 columns
rel_prices = (monthly_percentiles
.groupby('percentile')
['price']
.transform(lambda s: s / s.iloc[0])
)
rel_percentiles = monthly_percentiles.assign(rel_price=rel_prices)
rel_percentiles
date | percentile | price | rel_price | |
---|---|---|---|---|
0 | 2003-04-30 | 10 | 255000.00 | 1.00 |
1 | 2003-04-30 | 30 | 340000.00 | 1.00 |
2 | 2003-04-30 | 50 | 421000.00 | 1.00 |
... | ... | ... | ... | ... |
337 | 2008-11-30 | 50 | 365000.00 | 0.87 |
338 | 2008-11-30 | 70 | 515000.00 | 0.96 |
339 | 2008-11-30 | 90 | 841500.00 | 1.07 |
340 rows × 4 columns
sns.lineplot(data=rel_percentiles,
x='date', y='rel_price', hue='percentile')
plt.legend(bbox_to_anchor=(1.03, 1), borderaxespad=0);

What do you notice?
When we follow the 10th percentile line plot over time, we see that it increases quickly in 2005, stays high relative to its 2003 value for a few years, and then drops earlier and faster than the other line plots. The less expensive houses, such as starter homes, suffered greater volatility and lost much more value in the housing market crash. To make the analysis more thorough, we would want to adjust price for inflation and see how that impacts the trend in time.
10.5.7. What have we discovered?¶
Our EDA has uncovered several interesting phenomenon. Briefly, some that are most notable are:
Sale price and building size are highly skewed to the right with one mode.
Price per square foot decreases nonlinearly with building size, with smaller houses costing more per square foot than larger houses, and the price per square foot being roughly constant for houses with three or more bedrooms.
More desirable locations add a bump in sale price that is roughly the same size for houses of different sizes.
Over time, the rise and crash of house prices was more dramatic, rising more quickly, falling faster, and falling well below the 2003 value, for houses in the lower 10 to 30 percentiles of the market.
There are many additional explorations we can perform, and there are several checks that we should make. These include: investigating the 436 value for lot size; adjusting sale price for inflation; and crosschecking unusual houses, like the 15 bedroom house and the $20m house, with online real estate apps. Despite being brief, this section conveys the basic approach of EDA in action. For an extended case study on a different dataset, see the Case Study: Data Science for Accurate and Timely Air Quality Measurements chapter.