A US-based housing company named Surprise Housing has decided to enter the Australian market. The company uses data analytics to purchase houses at a price below their actual values and flip them on at a higher price. For the same purpose, the company has collected a data set from the sale of houses in Australia. The data is provided in the CSV file below.
The company is looking at prospective properties to buy to enter the market. You are required to build a regression model using regularisation in order to predict the actual value of the prospective properties and decide whether to invest in them or not.
The company wants to know:
Which variables are significant in predicting the price of a house, and
How well those variables describe the price of a house.
Also, determine the optimal value of lambda for ridge and lasso regression.
To Build a model that predict the price of houses with the available independent variables. This model will then be used by the management to understand how exactly the prices vary with the variables. They can accordingly manipulate the strategy of the firm and concentrate on areas that will yield high returns. Further, the model will be a good way for management to understand the pricing dynamics of a new market.
MSSubClass: Identifies the type of dwelling involved in the sale.
20 1-STORY 1946 & NEWER ALL STYLES
30 1-STORY 1945 & OLDER
40 1-STORY W/FINISHED ATTIC ALL AGES
45 1-1/2 STORY - UNFINISHED ALL AGES
50 1-1/2 STORY FINISHED ALL AGES
60 2-STORY 1946 & NEWER
70 2-STORY 1945 & OLDER
75 2-1/2 STORY ALL AGES
80 SPLIT OR MULTI-LEVEL
85 SPLIT FOYER
90 DUPLEX - ALL STYLES AND AGES
120 1-STORY PUD (Planned Unit Development) - 1946 & NEWER 150 1-1/2 STORY PUD - ALL AGES 160 2-STORY PUD - 1946 & NEWER 180 PUD - MULTILEVEL - INCL SPLIT LEV/FOYER 190 2 FAMILY CONVERSION - ALL STYLES AND AGES MSZoning: Identifies the general zoning classification of the sale. A Agriculture C Commercial FV Floating Village Residential I Industrial RH Residential High Density RL Residential Low Density RP Residential Low Density Park RM Residential Medium Density
LotFrontage: Linear feet of street connected to property
LotArea: Lot size in square feet
Street: Type of road access to property
Grvl Gravel Pave Paved
Alley: Type of alley access to property
Grvl Gravel Pave Paved NA No alley access
LotShape: General shape of property
Reg Regular IR1 Slightly irregular IR2 Moderately Irregular IR3 Irregular
LandContour: Flatness of the property
Lvl Near Flat/Level Bnk Banked - Quick and significant rise from street grade to building HLS Hillside - Significant slope from side to side Low Depression
Utilities: Type of utilities available AllPub All public Utilities (E,G,W,& S) NoSewr Electricity, Gas, and Water (Septic Tank) NoSeWa Electricity and Gas Only ELO Electricity only
LotConfig: Lot configuration
Inside Inside lot Corner Corner lot CulDSac Cul-de-sac FR2 Frontage on 2 sides of property FR3 Frontage on 3 sides of property LandSlope: Slope of property Gtl Gentle slope Mod Moderate Slope Sev Severe Slope
Neighborhood: Physical locations within Ames city limits
Blmngtn Bloomington Heights Blueste Bluestem BrDale Briardale BrkSide Brookside ClearCr Clear Creek CollgCr College Creek Crawfor Crawford Edwards Edwards Gilbert Gilbert IDOTRR Iowa DOT and Rail Road MeadowV Meadow Village Mitchel Mitchell Names North Ames NoRidge Northridge NPkVill Northpark Villa NridgHt Northridge Heights NWAmes Northwest Ames OldTown Old Town SWISU South & West of Iowa State University Sawyer Sawyer SawyerW Sawyer West Somerst Somerset StoneBr Stone Brook Timber Timberland Veenker Veenker
Condition1: Proximity to various conditions
Artery Adjacent to arterial street Feedr Adjacent to feeder street Norm Normal RRNn Within 200' of North-South Railroad RRAn Adjacent to North-South Railroad PosN Near positive off-site feature--park, greenbelt, etc. PosA Adjacent to postive off-site feature RRNe Within 200' of East-West Railroad RRAe Adjacent to East-West Railroad Condition2: Proximity to various conditions (if more than one is present) Artery Adjacent to arterial street Feedr Adjacent to feeder street Norm Normal RRNn Within 200' of North-South Railroad RRAn Adjacent to North-South Railroad PosN Near positive off-site feature--park, greenbelt, etc. PosA Adjacent to postive off-site feature RRNe Within 200' of East-West Railroad RRAe Adjacent to East-West Railroad
BldgType: Type of dwelling 1Fam Single-family Detached 2FmCon Two-family Conversion; originally built as one-family dwelling Duplx Duplex TwnhsE Townhouse End Unit TwnhsI Townhouse Inside Unit
HouseStyle: Style of dwelling
1Story One story 1.5Fin One and one-half story: 2nd level finished 1.5Unf One and one-half story: 2nd level unfinished 2Story Two story 2.5Fin Two and one-half story: 2nd level finished 2.5Unf Two and one-half story: 2nd level unfinished SFoyer Split Foyer SLvl Split Level OverallQual: Rates the overall material and finish of the house
10 Very Excellent 9 Excellent 8 Very Good 7 Good 6 Above Average 5 Average 4 Below Average 3 Fair 2 Poor 1 Very Poor OverallCond: Rates the overall condition of the house
10 Very Excellent 9 Excellent 8 Very Good 7 Good 6 Above Average 5 Average 4 Below Average 3 Fair 2 Poor 1 Very Poor
YearBuilt: Original construction date
YearRemodAdd: Remodel date (same as construction date if no remodeling or additions)
RoofStyle: Type of roof
Flat Flat Gable Gable Gambrel Gabrel (Barn) Hip Hip Mansard Mansard Shed Shed
RoofMatl: Roof material
ClyTile Clay or Tile CompShg Standard (Composite) Shingle Membran Membrane Metal Metal Roll Roll Tar&Grv Gravel & Tar WdShake Wood Shakes WdShngl Wood Shingles
Exterior1st: Exterior covering on house
AsbShng Asbestos Shingles AsphShn Asphalt Shingles BrkComm Brick Common BrkFace Brick Face CBlock Cinder Block CemntBd Cement Board HdBoard Hard Board ImStucc Imitation Stucco MetalSd Metal Siding Other Other Plywood Plywood PreCast PreCast Stone Stone Stucco Stucco VinylSd Vinyl Siding Wd Sdng Wood Siding WdShing Wood Shingles Exterior2nd: Exterior covering on house (if more than one material)
AsbShng Asbestos Shingles AsphShn Asphalt Shingles BrkComm Brick Common BrkFace Brick Face CBlock Cinder Block CemntBd Cement Board HdBoard Hard Board ImStucc Imitation Stucco MetalSd Metal Siding Other Other Plywood Plywood PreCast PreCast Stone Stone Stucco Stucco VinylSd Vinyl Siding Wd Sdng Wood Siding WdShing Wood Shingles MasVnrType: Masonry veneer type
BrkCmn Brick Common BrkFace Brick Face CBlock Cinder Block None None Stone Stone MasVnrArea: Masonry veneer area in square feet
ExterQual: Evaluates the quality of the material on the exterior Ex Excellent Gd Good TA Average/Typical Fa Fair Po Poor ExterCond: Evaluates the present condition of the material on the exterior Ex Excellent Gd Good TA Average/Typical Fa Fair Po Poor Foundation: Type of foundation BrkTil Brick & Tile CBlock Cinder Block PConc Poured Contrete Slab Slab Stone Stone Wood Wood BsmtQual: Evaluates the height of the basement
Ex Excellent (100+ inches) Gd Good (90-99 inches) TA Typical (80-89 inches) Fa Fair (70-79 inches) Po Poor (<70 inches NA No Basement
BsmtCond: Evaluates the general condition of the basement
Ex Excellent Gd Good TA Typical - slight dampness allowed Fa Fair - dampness or some cracking or settling Po Poor - Severe cracking, settling, or wetness NA No Basement BsmtExposure: Refers to walkout or garden level walls
Gd Good Exposure Av Average Exposure (split levels or foyers typically score average or above) Mn Mimimum Exposure No No Exposure NA No Basement BsmtFinType1: Rating of basement finished area
GLQ Good Living Quarters ALQ Average Living Quarters BLQ Below Average Living Quarters Rec Average Rec Room LwQ Low Quality Unf Unfinshed NA No Basement
BsmtFinSF1: Type 1 finished square feet
BsmtFinType2: Rating of basement finished area (if multiple types)
GLQ Good Living Quarters ALQ Average Living Quarters BLQ Below Average Living Quarters Rec Average Rec Room LwQ Low Quality Unf Unfinshed NA No Basement BsmtFinSF2: Type 2 finished square feet
BsmtUnfSF: Unfinished square feet of basement area
TotalBsmtSF: Total square feet of basement area
Heating: Type of heating Floor Floor Furnace GasA Gas forced warm air furnace GasW Gas hot water or steam heat Grav Gravity furnace OthW Hot water or steam heat other than gas Wall Wall furnace HeatingQC: Heating quality and condition
Ex Excellent Gd Good TA Average/Typical Fa Fair Po Poor
CentralAir: Central air conditioning
N No Y Yes
Electrical: Electrical system
SBrkr Standard Circuit Breakers & Romex FuseA Fuse Box over 60 AMP and all Romex wiring (Average) FuseF 60 AMP Fuse Box and mostly Romex wiring (Fair) FuseP 60 AMP Fuse Box and mostly knob & tube wiring (poor) Mix Mixed
1stFlrSF: First Floor square feet
2ndFlrSF: Second floor square feet
LowQualFinSF: Low quality finished square feet (all floors)
GrLivArea: Above grade (ground) living area square feet
BsmtFullBath: Basement full bathrooms
BsmtHalfBath: Basement half bathrooms
FullBath: Full bathrooms above grade
HalfBath: Half baths above grade
Bedroom: Bedrooms above grade (does NOT include basement bedrooms)
Kitchen: Kitchens above grade
KitchenQual: Kitchen quality
Ex Excellent Gd Good TA Typical/Average Fa Fair Po Poor
TotRmsAbvGrd: Total rooms above grade (does not include bathrooms)
Functional: Home functionality (Assume typical unless deductions are warranted)
Typ Typical Functionality Min1 Minor Deductions 1 Min2 Minor Deductions 2 Mod Moderate Deductions Maj1 Major Deductions 1 Maj2 Major Deductions 2 Sev Severely Damaged Sal Salvage only
Fireplaces: Number of fireplaces
FireplaceQu: Fireplace quality
Ex Excellent - Exceptional Masonry Fireplace Gd Good - Masonry Fireplace in main level TA Average - Prefabricated Fireplace in main living area or Masonry Fireplace in basement Fa Fair - Prefabricated Fireplace in basement Po Poor - Ben Franklin Stove NA No Fireplace
GarageType: Garage location 2Types More than one type of garage Attchd Attached to home Basment Basement Garage BuiltIn Built-In (Garage part of house - typically has room above garage) CarPort Car Port Detchd Detached from home NA No Garage GarageYrBlt: Year garage was built GarageFinish: Interior finish of the garage
Fin Finished RFn Rough Finished Unf Unfinished NA No Garage
GarageCars: Size of garage in car capacity
GarageArea: Size of garage in square feet
GarageQual: Garage quality
Ex Excellent Gd Good TA Typical/Average Fa Fair Po Poor NA No Garage
GarageCond: Garage condition
Ex Excellent Gd Good TA Typical/Average Fa Fair Po Poor NA No Garage
PavedDrive: Paved driveway
Y Paved P Partial Pavement N Dirt/Gravel
WoodDeckSF: Wood deck area in square feet
OpenPorchSF: Open porch area in square feet
EnclosedPorch: Enclosed porch area in square feet
3SsnPorch: Three season porch area in square feet
ScreenPorch: Screen porch area in square feet
PoolArea: Pool area in square feet
PoolQC: Pool quality Ex Excellent Gd Good TA Average/Typical Fa Fair NA No Pool Fence: Fence quality GdPrv Good Privacy MnPrv Minimum Privacy GdWo Good Wood MnWw Minimum Wood/Wire NA No Fence
MiscFeature: Miscellaneous feature not covered in other categories Elev Elevator Gar2 2nd Garage (if not described in garage section) Othr Other Shed Shed (over 100 SF) TenC Tennis Court NA None MiscVal: $Value of miscellaneous feature
MoSold: Month Sold (MM)
YrSold: Year Sold (YYYY)
SaleType: Type of sale WD Warranty Deed - Conventional CWD Warranty Deed - Cash VWD Warranty Deed - VA Loan New Home just constructed and sold COD Court Officer Deed/Estate Con Contract 15% Down payment regular terms ConLw Contract Low Down payment and low interest ConLI Contract Low Interest ConLD Contract Low Down Oth Other SaleCondition: Condition of sale
Normal Normal Sale Abnorml Abnormal Sale - trade, foreclosure, short sale AdjLand Adjoining Land Purchase Alloca Allocation - two linked properties with separate deeds, typically condo with a garage unit Family Sale between family members Partial Home was not completed when last assessed (associated with New Homes)
