Introduction
The prices of various items in the market can be calculated using different methods. One of the commonly used methods is the regression method. This is divided into two; simple regression and multiple regression methods. In this paper, we use multiple regression method to determine the price of selling a house in East Ville. The use of regression analysis in statistics comes out due to the fact that there are both dependent and independent variables that surround the price of the house. Thus the purpose of using this analysis is to find the coefficients of the independent valuables. These are got while it is assumed that the independent variables are constant.
Hypothesis analysis
The various companies that are active in real estate have set different prices for their houses. Coming up with a standardized price rate is always an activity that requires a lot of analysis. The buyers of these houses should also be aware of the criterion that is used in setting the prices to avoid the exploitation of the sellers.
In our analysis, we shall use the square feet area that the house covers, the bedrooms that the house contains, the number and type of baths, the regulation of temperature and ventilation of the house the availability of garage. The basement of the house can be used as one of the valuables. The other valuable that shall be used is the fire fighting equipment and flexibility of the house. Also there are other variables that are independent also worth in the analysis.
The independent valuables
Effects of inflation
Before we come up with the regression analysis of prices of houses in East Ville, we shall first look into the independent valuables that affect the prices if houses in the area. One of the independent valuables is the inflation. The changes in the economy deal evenly to all industries. This means that it pushes prices either upwards or down wards. However, it is note worth that the prices or items in the real estate rarely go down. This implies that when the there is high inflation and the prices of other items in the economy rises, the prices of the houses also appreciate,. On the contrary, when the prices of other item fall due to the effect of inflation, the prices of the houses and other items in the real estate remain stagnant. This is one of the advantages of investing in the real estate.
Government standards
The government has the constitutional rights to control the market prices of all the products. This is one of the ways that the government gets involved in trade. This implies that, the government may quote the lowest price that the houses of a certain type can be sold and also the government can put a maximum price. This affect all the companies as; one the buyer is advised of the regulation and may sue for aggression should any seller quote a price outside the blackest, and also, the prices have to be within the brackets regardless of the cost of production that was incurred by the builder in the building of the house.
The government standards also affect the quality and type of houses to be built in certain areas. This is referred to as controlled development. Where this is applicable, the seller has to build a house that is in accordance to the regulation. This means that houses of the same type are built at the same place which translates to high and close competition. An ideal example is the regulation in apple district.
Competitive market analysis
This is the formula the realtor use when determining the prices of a house. In the determination, the prices of comparable homes in an area are carried at. As noted earlier in this paper, the area that is being covered is East Ville. As noted above the dependent valuables are the major contributors to the value of the house.
Bedrooms
The size and the number of bedrooms is one of the major factors that is looked at when determining the price of a house. The ideal house in Apple district had three bedrooms. In this the lowest was priced at 59 while the highest was priced at 113. This however, was dependent on other dependent valuables.
The other valuable was the proximity to school. The education in this area is held highly. Thus the closer the house is to a school the higher it is priced. However, some of the realtors did not indicate the proximity to school as they did not find it necessary. Still in this rating the lowest priced house was 59 while the lowest priced house was at 113.
The other major requirement of a house in East Ville is transport. For effective transport, the household had to own a house. This meant that the availability of a garage was a price booster. The more the number of garages the higher priced the house is at East Ville. The ideal house has two garages. Each of these garages has the capacity of holding more than one vehicle. The highest priced house with two garages was priced at 156.9.
The availability of the garages goes hand in hand with the style of the house. The styles are coded inn this area. It is note worth that this does not to a large extent affect the prices as most of the houses have similar styles. There are two distinct styles that are used by the houses in this area.
Baths
The ideal house in East Ville has two baths. However, there are houses that had three baths. The increment in the number of baths also increased the value of the house. This also went alongside the square feet that the house occupied. The larger the baths, the bedrooms, and other section of the house the larger the square feet the house occupied. Storey houses could consume less ground area that the flat. The square feet did not only cover the ground area but the total floor area of the house.
The age of the house
This item of the price of a house comes in after other valuables as mentioned above. The value of the house as note elsewhere in the paper does not depreciate. The effects of wear and tear that affect other fixed assets are weak compared to the factors that affect the appreciation of the house. However, it is note worth that; the houses that are recently built are relatively costly as compared to the houses that were erected times back. The highest priced house in East Ville is one year old and is priced at 192. This is a rare case where a one year old house is been sold. The average age of houses in this area is six years. The effect of age is also determined alongside the maintenance that the house has received over the years. A well maintained house is priced higher that the poorly maintained house.
Profit margin
This is the last item that a realtor has to look at. This is because, the profit margin is usually a derivative of other valuables that are include in this paper. The profit margins for houses in this area are controlled by the government. In the construction of the house, the realtor is required to prepare the financial records that he or she has to use in valuing the house.
Conclusion
Both the dependent and independent valuables have to be considered in attaining the price of a house. The competition of the real estate products in East Ville calls for each of the competitor to be very careful on what to include and what not to include in the plan which in the long run determines the price of a house. The profit margin in the area is usually controlled by the government. This implies that the realtors have to produce the records of erecting a house before quoting their prices. This is done to protect the buyers in the real estate business.