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Introduction
Gulf Real Estate Properties, Inc., expert in the real estate market want to analysis sales of real estate
property. The real estate firm located in Southwest Florida, monitors condominium sales by collecting data on
the location, list price, sale price, and number of days it takes to sell. The location of condominium is
classified by two types as Gulf View and No Gulf View. The Gulf View is located directly on the Gulf
of Mexico and the No Gulf view is located on the bay or a golf course, near but not on the gulf. Recent
sample sales data for 90 Gulf view condominiums and 50 No Gulf view condominiums were collected
from data of sales from Naples, Florida. The objective is to come up with an estimate of the final selling price
and number of days to sell the when the list price for Gulf view and No Gulf View condominiums are
given. We will be using descriptive statistics to give an idea to real estate agent about how the condominium
market is. We will also be using percentage confidence interval estimation method to find the sample data
mean in relation to the census mean of list prices and average days took to sell each type of condominiums.
2. Data Analysis
2.1 Gulf View Condominiums Statistics
Ref to Table 1
By
Average sale price for Gulf view condominiums as per sample date is $ 455,742.22. Minimum selling
price is $ 165,000.00 and maximum selling price is $ 975,000.00.
Stats Bros
Rafael Aita Junek
Krishna Chaitanya Tummala
List Price
$
474,828.89
20564.91
$
435,000.00
$
469,000.00
195095.88
38062403425.72
1.06
805100
$
169,900.00
$
975,000.00
$ 42,734,600.00
90
Sale Price
$
455,742.22
20133.13
$
410,000.00
$
305,000.00
190999.63
36480858871.41
1.11
810000
$
165,000.00
$
975,000.00
$ 41,016,800.00
90
Days to Sell
105.99
5.49
96
85
52.13
2717.13
0.94
254
28
282
9539
90
List Price
$ 214,460.00
6913.87
$ 212,500.00
$ 279,000.00
48888.44
2390079183.67
0.47
174000.00
$ 148,000.00
$ 322,000.00
$ 10,723,000.00
50
Sale Price
$ 204,474.00
6148.49
$ 203,500.00
$ 230,000.00
43476.41
1890197881.63
0.29
157000.00
$ 135,500.00
$ 292,500.00
$ 10,223,700.00
50
Days to Sell
129.32
10.09
122.00
150.00
71.36
5091.73
1.35
290
48
338
6466
50
2.3 Averages
In every category the condominiums with a gulf view outperformed the other condominiums. The mean
of the Gulf View Condominiums List Price and Sale Price are higher, and the number of days it takes to sell
the home is less. To simplify the Gulf View Condominiums sell for more and quicker.
$300.00
$ In 000's
$200.00
$100.00
$1
Gulf View Condominiums
2
No Gulf view Condominiums
Comparing data from Table 1 and Table 2 Gulf View Condominiums have a mean list price of $
474,828.89, while No Gulf View Condominiums have a mean of $ 214,460.00. The difference between these
two numbers could be argued that Gulf of Mexico views can increase a homes listing price by almost double
its current asking price. The average sale Price of the Gulf View Condominiums is $ 455,742.22, whereas the
No Gulf View Condominiums have an average of $ 204,474.00.The one statistic that No Gulf View
Condominiums do not want to have a higher value than the Gulf View Condominiums is the actual statistic
that they are higher on. When you are trying to sell a home, you do not want it to take forever. The No Gulf
View Condominiums takes a mean of 129.32 days to sell, compared to Gulf View Condominiums taking only
105.99 days. That is a difference of 23.33 days, a week shy of one month more to sell a condominium.
When you look at the difference of the List Price subtracted by the Sale Price, a real estate agent could
make it look in favor of the Gulf View Condominiums. The Gulf View Condominiums have a difference of $
19086.67, whereas the No Gulf View Condominiums is only $ 9,986.00. This difference makes it look like No
Gulf View Condominiums sell closer to their list price, but this is untrue. Instead of subtracting the mean Sale
Price from the List Price, and you divide the Sale Price by the List Price you get the percentile of the
difference. In doing this you learn that on average the Gulf View Condominiums retain 95.82% of their
listing price, whereas the No Gulf View Condominiums only retain 95.65%. So not only do the gulf view
homes list and sell for more quickly, but it also sells closer to their list value.
Sales Price
Days to sell
90
90
Sample Mean ( xx )
Standard Deviation ( s )
Confidence Level ( 1- )
Level of significance ( )
Degrees of Freedom ( n-1 )
t0.025 (t/2)
$ 455,742.22
190999.63
95%
5%
89
1.987
105.99
52.13
95%
5%
89
1.987
Table 3
Sale Price: The Formula for finding the mean interval for selling price of the sample with 95%
confidence interval estimate is as given below:
= xx [(t/2)* S/n]
= 455742.22 (1.987 x 190999.63/ 90)
= 455742.22 (40004.53)
= (415737.70, 495746.75)
So the interval is (415737.70, 495746.75)
With 95% confidence we can expect that the mean sale price for the population of Gulf view
condominiums is between $ 415737.70 and $ 495746.75.
Days to sell: Formula for finding mean interval for number of days to sell of the sample with 95%
confidence interval estimate is as given below:
= xx [(t/2)* S/n]
= 105.99 (1.987 x 52.13/ 90)
= 105.99 (10.92)
= (95.07, 116.91)
So the interval is (95.07, 116.91)
With 95% confidence we can expect that the average days to sell for the population of Gulf view
condominiums is between 95 days and 117 days.
To develop the 95% interval for the population mean sales price and the population mean number
of days of No Gulf View Condominium, we will use the T-table since the standard deviation () is
unknown.
You can find below the table and calculations used to find the 95% interval of the population
mean sales price and the population mean number of days.
No Gulf View
Sales Price
Condominiums
Sample Data ( n )
Days to sell
50
50
$204,474.00
129.32
Standard Deviation ( s )
43476.41
71.36
Confidence Level ( 1- )
95%
95%
Level of significance ( )
5%
5%
49
49
2.01
2.01
Sample Mean ( xx )
t0.025 (t/2)
Table 4
Sales price: The process to find the 95% interval for the sales price is shown below.
= xx [(t/2)* S/n]
= 204,474.00 (2.01 x 43476.41/ 49)
= 204,474.00 (12,483.94)
= (191,990.06, 216,957.94)
So the interval is (191,990.06, 216,957.94)
With 95% confidence we can expect that the mean sale price for the population of No Gulf view
condominiums is between $ 191,990.06 and $ 216,957.94.
Days to sell: The process to find the 95% interval for the days to sell is shown below.
= xx [(t/2)* S/n]
= 129.32 (2.01 x 71.36/ 49)
= 129.32 (20.4905)
= (108.83, 149.8)
So the interval is (108.83, 149.8)
With 95% confidence we can expect that the mean days to sale for the population of No Gulf
view condominiums is between 108.83 and 149.8 days.
is the population standard deviation taken with reference to sample data given.
N = (190999.632 * 1.962) / 400002
N = 87.59
A sample size of 88 is desirable for a margin of error of 40,000 at the 95% confidence level for
the Gulf view condominiums.
The process to find the sample size of the No Gulf view condominiums is shown below.
N = (2 *(Z/2)2) / E2
is the population standard deviation taken with reference to sample data given.
N = (43476.412 * 1.962) / 150002
N = 32.27
A sample size of 32 is desirable for a margin of error of 15,000 at the 95% confidence level for
the No Gulf view condominiums.
We will be comparing list price sample data with the sales price and days to sell sample data
to estimate the selling price and no of days took to sell from list price given. Scatter plot will be
used to find the trends and the equation of trend line to know about the relationship between two
variable.
From the Appendix in pages 11 & 12 equations of the trend lines taken to calculate estimates
Estimated sale price for Gulf view given list price as $589,000.00
y = 0.9763x - 7815.2 => y= 0.9763*(589000)-7815.2
Estimate of final selling price = y= $ 567,225.50
Estimated no of days for Gulf view given list price as $589,000.00
y = 3E-05x + 91.257=> y=.000031(589000) +91.257
Estimate of final selling price = y= 109.52 days
Estimated sale price for No Gulf view given list price as $285,000.00
y = 0.8827x + 15164=> y= 0.8827*(285000) +15164
Estimate of final selling price = y= $ 266,733.5
Estimated sale price for No Gulf view given list price as $285,000.00
y = -0.00063x + 263.74=> y= -0.00063*(285000) +263.74
Estimate of final selling price = y= 84.19 days
6. Conclusion
Gulf Real Estate Property Inc. should take in account the following conclusions:
Even though the Gulf view condominiums are more expensive than the no Gulf view
condominiums, it takes 23 fewer days in average to sell the former more expensive
condominiums.
The sample size for the Gulf view condominiums should approximately stay the same
after taking in consideration the desired margin of error requested by management.
However, the sample size for the No gulf view should decrease to 34, in order to meet the
I.
Appendix
800000
Sale Price in $
600000
400000
200000
0
500000
1000000
1500000
List Price In $
No of Days to sell
150
f(x) = 0x + 91.26
100
50
0
0
500000
1000000
List Price in $
1500000
250000
200000
Sale Price in $
150000
100000
50000
0
100000
150000
200000
250000
300000
350000
List Price in $
Days to sell
200
150
f(x) = - 0x + 263.74
100
50
0
100000
150000
200000
250000
List Price in $
300000
350000