# Predicting House Sale Prices in Ames, Iowa¶

Jack Kolberg-Edelbrock, MS

## Executive Summary¶

In this project, I worked with the Ames, Iowa housing dataset with the goal of predicting home prices based upon the many data columns within the dataset. Using a combination of data cleaning and feature engineering, I produced a dataset with information usable by a machine learning model. Afterwards, I examined individual columns in the dataset to determine which columns would be non-collinear and a good fit for use in the machine learning model. Finally, I performed K nearest neighbor and linear regression fits on multiple subsets of the chosen data to obtain a linear regression RMSE of \$25,032, or 14% on an average sale price of \\$175,778

## Introduction¶

The Ames, Iowa housing dataset represents a classic exercise in machine learning. This extensive dataset contains information ranging from the unquestionably important square footage of a house down to the value of the dilapidated shed that the owner forgot was in their backyard. The multitude of datapoints provided in the dataset challenges learners to perform extensive data cleaning as well as think critically about the interplay of seemingly different pieces of data before including them in a machine learning model.

In this project, I performed used feature engineering and machine learning to analyze the Ames, Iowa housing dataset.

## Imports¶

In [1]:
import pandas as pd
import matplotlib.pyplot as plt
import numpy as np
import seaborn as sns

from sklearn.linear_model import LinearRegression
from sklearn.neighbors import KNeighborsRegressor
from sklearn.metrics import mean_squared_error
from sklearn.model_selection import cross_val_score, KFold

data = pd.read_csv('./Data/AmesHousing.tsv', delimiter = '\t')
data_copy = data.copy()


## Data Transformation Dictionaries¶

### Transform Dictionary¶

This dictionary contains information for remapping values in most columns of the input data. There are two purposes for this transformation:

1. Transform "falsely categorical" categorical columns into numeric columns:
• Heating QC = ['Ex', 'Gd', 'TA', 'Fa', 'Po', np.nan]
• Can be interpreted numerically as
• Heating QC = [2, 1, 0, -1, -2, -2]
2. Make abbreviated values in the columns more meaningful to a human:
• 'MS SubClass': 20 --> 'MS SubClass': '1StoryNew'
In [2]:
transform_dictionary = {'MS SubClass':     { 20:'1StoryNew',           30:'1StoryOld',          40:'1StoryFinishedAttic',
45:'1.5StoryUnfinished',  50:'1.5StoryFinished',   60:'2StoryNew',
70:'2StoryOld',           75:'2.5Story',           80:'SplitLevel',
85:'SplitFoyer',          90:'Duplex',            120:'1StoryPlannedNew',
150:'1.5StoryPlanned',    160:'2StoryPlannedNew',  180:'MultiLevelPlanned',
190:'2FamilyConversion'},
'MS Zoning':       { 'C':'Commercial',              'FV':'FloatingVillage',        'I':'Industrial',
'RH':'HighDensityResidential',  'RL':'LowDensityResidential', 'RP':'LowDensityResidential_Park',
'RM':'MediumDensityResidential'},
'Street':          {'Grvl':'Gravel', 'Pave':'Paved'},
'Lot Shape':       {'Reg':'Regular', 'IR1':'SlightlyIrregular', 'IR2':'ModeratelyIrregular', 'IR3':'Irregular'},
'Alley':           {'Grvl':'Gravel', 'Pave':'Pave', np.nan:'None'},
'Utilities':       {'AllPub':'All', 'NoSewr':'NoSewer', 'NoSeWa':'NoWater/NoSewer', 'ELO':'ElectricOnly'},
'Lot Config':      {'Inside':'Inner', 'Corner':'Corner', 'CulDSac':'CulDSac','FR2':'2SideFrontage',
'FR3':'3SideFrontage'},
'Land Slope':      {'Gtl':'Gentle', 'Mod':'Moderate', 'Sev':'Severe'},
'Neighborhood':    {'Blmngtn':'Bloomington Heights',  'Blueste':'Bluestem',            'BrDale':'Briardale',
'BrkSide':'Brookside',            'ClearCr':'Clear Creek',         'CollgCr':'College Creek',
'Crawfor':'Crawford',             'Edwards':'Edwards',             'Gilbert':'Gilbert',
'Greens':'Greens',                'GrnHill':'Green Hill',          'IDOTRR':'Iowa DOT and Railroad',
'NAmes':'North Ames',             'NPkVill':'Northpark Villa',     'NWAmes':'Northwest Ames',
'NoRidge':'Northridge',           'NridgHt':'Northridge Heights',  'OldTown':'Old Town',
'SWISU':'Southwest ISU',          'Sawyer':'Sawyer',               'SawyerW':'Sawyer West',
'Somerst':'Somerset',             'StoneBr':'Stone Brook',         'Timber':'Timberland',
'Veenker':'Veenker'},
'Condition 1':     {'Artery':'OnArtery',      'Feedr':'OnFeeder',           'Norm':'NoSpecialCond',
'Condition 2':     {'Artery':'OnArtery',      'Feedr':'OnFeeder',           'Norm':'NoSpecialCond',
'Bldg Type':       {'1Fam':'SingleFamily',    '2FmCon':'2FamilyConversion', 'Duplx':'Duplex',
'TwnhsE':'TownhouseEnd',  'TwnhsI':'TownhouseInner'},
'Exter Qual':      {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2},
'Roof Style':      {'Flat':'Flat', 'Gable':'Gable', 'Gambrel':'Barn', 'Hip':'Hip', 'Mansard':'Mansard',
'Shed':'Shed'},
'Roof Matl':       {'ClyTile':'ClayOrTile',   'CompShingle':'StandardShingle', 'Membran':'Membrane',
'Metal':'Metal',          'Roll':'Roll',                   'Tar&Grv':'TarGravel',
'WdShake':'WoodShake',    'WdShngl':'WoodShingle'},
'Exterior 1st':    {'AsbShng':'AsbestosShingles', 'AsphShn':'AsphaltShingles',   'BrkCommon':'CommonBrick',
'BrkFace':'FaceBrick',        'CBlock':'CinderBlock',        'CementBd':'CementBoard',
'HdBoard':'HardBoard',        'ImStucc':'ImitationStucco',   'MetalSd':'MetalSiding',
'Other':'Other',              'Plywood':'Plywood',           'PreCast':'PreCast',
'Stone':'Stone',              'VinylSd':'Vinyl',             'Wd Sdng':'WoodSiding',
'WdShing':'WoodShingles'},
'Exterior 2nd':    {'AsbShng':'AsbestosShingles',   'AsphShn':'AsphaltShingles',  'BrkCommon':'CommonBrick',
'BrkFace':'FaceBrick',          'CBlock':'CinderBlock',       'CementBd':'CementBoard',
'HdBoard':'HardBoard',          'ImStucc':'ImitationStucco',  'MetalSd':'MetalSiding',
'Other':'Other',                'Plywood':'Plywood',          'PreCast':'PreCast',
'Stone':'Stone',                'VinylSd':'Vinyl',            'Wd Sdng':'WoodSiding',
'WdShing':'WoodShingles'},
'Foundation':      {'BrkTil':'BrickTile',   'CBlock':'CinderBlock',   'PConc':'PouredConcrete',
'Slab':'ConcreteSlab',  'Stone':'Stone',          'Wood':'Wood'},
'Bsmt Cond':       {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2, np.nan:-2},
'Bsmt Exposure':   {'Gd':'Good', 'Av':'Average', 'Mn':'Minimal', 'No':'None', 'NA':'NoBasement'},
'BsmtFin Type 1':  {'GLQ':'GoodLivingQuarters',  'ALQ':'AverageLivingQuarters',  'BLQ':'PoorLivingQuarters',
np.nan:'None'},
'BsmtFin Type 2':  {'GLQ':'GoodLivingQuarters',  'ALQ':'AverageLivingQuarters',  'BLQ':'PoorLivingQuarters',
np.nan:'None'},
'Grav':'GravityFurnace',     'OthW':'NonGasWaterHeating', 'Wall':'WallFurnace'},
'Heating QC':      {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2},
'Central Air':     {'N':0, 'Y':1},
'Electrical':      {'SBrkr':'StandardBreakers', 'FuseA':'60ARomex', 'FuseF':'60AMixed',
'FuseP':'60AKnobTube',      'Mix':'Mixed'},
'Kitchen Qual':    {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2},
'Functional':      {'Typ':'Typical',          'Min1':'MinimalProblems', 'Min2':'MinimalProblems',
'Mod':'ModerateProblems', 'Maj1':'MajorProblems',   'Maj2':'MajorProblems',
'Sev':'SevereProblems',   'Sal':'SalvageOnly'},
'Fireplace Qu':    {'Ex':'ExceptionalMasonry',    'Gd':'Masonry',    'TA':'Prefab',    'Fa':'Prefab',
'Po':'Stove',                  np.nan:'None'},
'Garage Type':     {'2Types':'TwoTypes', 'Attchd':'Attached', 'Bsment':'Basement',
'BuiltIn':'BuiltIn', 'CarPort':'CarPort', 'Detchd':'Detached',
np.nan:'None'},
'Garage Qual':     {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2, np.nan:-2},
'Paved Drive':     {'Y':'Paved', 'P':'Mixed', 'N':'Unpaved'},
'Pool QC':         {'Ex':2, 'Gd':1, 'TA':0, 'Fa':-1, 'Po':-2, np.nan:-2},
'Fence':           {'GdPrv':'GoodPrivacy',   'MnPrv':'MinimalPrivacy',   'GdWo':'GoodWood',
'MnWw':'MinimumWire',    np.nan:'None'},
'Alloca':'Allocation', 'Family':'Family',
'Partial':'Partial'},
'Mo Sold':         {1:'Jan', 2:'Feb', 3:'Mar',  4:'Apr',  5:'May', 6:'Jun', 7:'Jul',
8:'Aug', 9:'Sep', 10:'Oct', 11:'Nov', 12:'Dec'}}


### Neighborhood Geographical Grouping¶

This dictionary contains the information needed to group individual neighborhoods (previously transformed by the dictionary above) into the more general 'geographic' groupings as defined in the main body of the project.

In [3]:
neighborhood_grouping =  {'Bloomington Heights':'Far North',  'Bluestem':'Southwest',           'Briardale':'Near North',
'Brookside':'Downtown',             'Clear Creek':'Near West',        'College Creek':'Far West',
'Crawford':'Southwest ISU',         'Edwards':'Near West',            'Gilbert':'Far North',
'Greens':'Northwest',               'Green Hill':'Far Southwest',     'Iowa DOT and Railroad':'Downtown',
'North Ames':'Near North',          'Northpark Villa':'Near North',   'Northwest Ames':'Near North',
'Northridge':'Northwest',           'Northridge Heights':'Northwest', 'Old Town':'Downtown',
'Southwest ISU':'Southwest',        'Sawyer':'Near West',             'Sawyer West':'Far West',
'Somerset':'Northwest',             'Stone Brook':'Far North',        'Timberland':'Far Southwest',
'Veenker':'Near West'}


## Core Functions¶

### transform_features¶

This function performs the majority of the data cleaning required in this project.

Parameters

• df_in = the DataFrame containing the data that will be transformed/cleaned
• transforms = a dictionary that is used to remap the data contained in df_in

Returns

• df = the transformed/cleaned DataFrame

Process description

1. Remap the DataFrame with the values stored in the transforms dictonary
2. Preprocess numeric columns:
• Fill np.nan values
• Cast all values as floats
3. Preprocess categorical columns:
• Identify prefixes for categorical columns
• Cast predummied and future dummy columns appropriately
• Generate non-engineered dummy columns
4. Perform feature engineering
• Altered temporal columns
• Summary columns for certain sets of numeric columns
• Combined dummy columns for sets of similar categorical columns
5. Clean-up
• Append dummies to DataFrame
• Remove consumed, unimportant, and unusable columns from DataFrame
In [4]:
def transform_features(df_in, transforms):
df = df_in.copy()

# ===========================
# Remap original values in df
# ---------------------------
for col in transforms.keys():
df[col] = df[col].map(transforms[col])
message = '===== Successfully remapped the dataframe ====='
print(f'\n{"=" * len(message)}\n{message}\n{"=" * len(message)}\n{list(transforms.keys())}\n')

# =============================
# Pre-process numerical columns
# -----------------------------
# List numeric columns according to na fill value
numeric_cols_fill_mean = ['Lot Frontage', 'Lot Area', 'Overall Cond', 'Year Built', 'Year Remod/Add', 'Exter Qual',
'Bsmt Cond', 'Heating QC', '1st Flr SF', 'Full Bath', 'Half Bath', 'Bedroom AbvGr',
'Kitchen Qual', 'Garage Yr Blt', 'Garage Qual','Pool QC', 'SalePrice']
numeric_cols_fill_zero = ['Total Bsmt SF', '2nd Flr SF', 'Bsmt Full Bath', 'Bsmt Half Bath', 'Fireplaces',
'Garage Area', 'Wood Deck SF', 'Open Porch SF', 'Enclosed Porch', '3Ssn Porch',
'Screen Porch', 'Misc Val',]

# Cast numeric columns as floats
df[numeric_cols_fill_mean] = df[numeric_cols_fill_mean].astype(float)
df[numeric_cols_fill_zero] = df[numeric_cols_fill_zero].astype(float)

# Fill missing values
for col in numeric_cols_fill_mean:
df[col] = df[col].fillna(df[col].mean())
for col in numeric_cols_fill_zero:
df[col] = df[col].fillna(0)

# ===============================
# Pre-process categorical columns
# -------------------------------
nl_categorical_cols = ['MS SubClass', 'MS Zoning', 'Street', 'Alley', 'Lot Shape', 'Utilities', 'Lot Config',
'Land Slope', 'Bldg Type', 'Roof Style', 'Roof Matl', 'Foundation', 'Bsmt Exposure',
'Heating', 'Electrical', 'Functional', 'Garage Type', 'Paved Drive',
'Fence', 'Mo Sold', 'Yr Sold', 'Sale Condition', 'Fireplace Qu', 'Neighborhood']
nl_categorical_prefixes = ['SubClass', 'Zoning', 'Street', 'Alley', 'LotShape', 'Utilities', 'Lot',
'LotSlope', 'Bldg', 'Roof', 'RoofMatl', 'Foundation', 'BsmtExposure',
'Heating', 'Electric', 'Condition', 'Garage', 'Driveway', 'Fence', 'MonthSold',
'YearSold', 'Sale', 'Fireplace', 'Nhood']

special_categorical_cols = ['Condition 1', 'Condition 2', 'BsmtFin Type 1', 'BsmtFin Type 2', 'Exterior 1st', 'Exterior 2nd']
special_categorical_prefixes = ['Location', 'Location', 'BasementFinish', 'BasementFinish', 'Exterior', 'Exterior']

# Cast categorical columns as objects
df[nl_categorical_cols] = df[nl_categorical_cols].astype(object)
df[special_categorical_cols] = df[special_categorical_cols].astype(object)
# Cast pre-dummied columns as ints

# Create normal dummies
nl_dummies = pd.DataFrame()
for i in range(len(nl_categorical_cols)):
dummy = pd.get_dummies(df[nl_categorical_cols[i]], nl_categorical_prefixes[i])
nl_dummies = pd.concat([nl_dummies, dummy], axis = 1)

# ===================
# Feature Engineering
# -------------------
# Convert feature built years to feature ages (2021 = ref year)
df['Years Since Remodel'] = 2021 - df['Year Remod/Add']
df['Garage Age'] = 2021 - df['Garage Yr Blt']

# Create column to represent historical homes (pre 1930)
df['Historical'] = (df['Year Built'] < 1930).astype(int)

# Create summative quantitative columns
df['Total SF'] = df['Total Bsmt SF'] + df['1st Flr SF'] + df['2nd Flr SF']
df['Porch SF'] = df['Open Porch SF'] + df['Enclosed Porch'] + df['3Ssn Porch'] + df['Screen Porch']
df['Bathrooms'] = df['Bsmt Full Bath'] + df['Full Bath'] + 0.5 * (df['Bsmt Half Bath'] + df['Half Bath'])

# Create summative dummies (ie, if a row has two of the same conditions, the value in the dummy can be 2)
location_dummies = pd.get_dummies(df['Condition 1'], 'Location') + pd.get_dummies(df['Condition 2'], 'Location')
bsmtfin_dummies = pd.get_dummies(df['BsmtFin Type 1'], 'BsmtFin') + pd.get_dummies(df['BsmtFin Type 2'], 'BsmtFin')
exterior_dummies = pd.get_dummies(df['Exterior 1st'], 'Exterior') + pd.get_dummies(df['Exterior 2nd'], 'Exterior')

# -------------------------------------------------------------------------------------------
# Function to drop columns
def drop_columns(df, cols, message):
df = df.drop(cols, axis = 1)
message = f'===== Dropped {len(cols)} {message} ====='
print(f'{"="*len(message)}\n{message}\n{"="*len(message)}\n{cols} \n')
return df
# -------------------------------------------------------------------------------------------

# ================
# Clean up dataset
# ----------------
# Append dummies back to df
df = pd.concat([df, nl_dummies, location_dummies, bsmtfin_dummies, exterior_dummies], axis = 1)

# Drop consumed columns
consumed_cols = ['Year Remod/Add', 'Garage Yr Blt', 'Year Built']
df = drop_columns(df, consumed_cols, 'columns after converting them to nominal data.')

# Drop combined columns
combined_cols = ['Total Bsmt SF', '1st Flr SF', '2nd Flr SF', 'Open Porch SF',
'Enclosed Porch', '3Ssn Porch', 'Screen Porch', 'Bsmt Full Bath',
'Full Bath', 'Bsmt Half Bath', 'Half Bath']
df = drop_columns(df, combined_cols, 'columns after combining them into summative quantitative columns')

# Drop categorical columns
df = drop_columns(df, nl_categorical_cols, 'columns after converting them to dummies.')
df = drop_columns(df, special_categorical_cols, 'columns after converting them to dummies and combining them.')

# Drop uncategorizable and unquantifiable columns
uncat_unquant_cols = ['Order', 'PID']
df = drop_columns(df, uncat_unquant_cols, 'columns that contained uncategorizable and unquantifiable data.')

# Drop duplicated columns
duplicate_cols =     ['Exter Cond', 'Garage Finish', 'Garage Cond', 'Bsmt Unf SF',
'Bsmt Qual', 'Garage Cars', 'BsmtFin SF 1', 'BsmtFin SF 2',
'House Style', 'Gr Liv Area', 'TotRms AbvGrd', 'Land Contour']
df = drop_columns(df, duplicate_cols, 'columns which contained data represented in other columns.')

# Drop unimportant columns
unimportant_cols =   ['Mas Vnr Type', 'Mas Vnr Area','Sale Type', 'Misc Feature', 'Low Qual Fin SF']
df = drop_columns(df, unimportant_cols, 'columns which did not contain useful information.')

# Drop unused categorical columns
unused_categorical = ['Exterior_Other', 'Exterior_WoodShingles', 'Condition_SalvageOnly']
df = drop_columns(df, unused_categorical, 'categorical columns which contained no information.')

message = f'===== After cleaning there are {data_copy.shape[1]} data columns ====='
print(f'{"=" * len(message)}\n{message}\n{"=" * len(message)}')

return df


### select_features¶

Selects fit features on the basis of a correlation cutoff.

Parameters

• df = the dataframe from which to select features, this should contain correlations between variables
• positive_cutoff = the correlation cutoff below which positive correlations are considered insignificant
• negative_cutoff = the correlation cutoff above which negative correlations are considered insignificant
• target_col = the name of the column that we are interested in correlations against (ie: SalePrice)
• exclude = columns that we are not interested in viewing the correlations of

Returns

• A list of column titles that have a positive correlation greater than positive_cutoff
• A list of column titles that have a negative correlation less than the negative_cutoff
In [5]:
def select_features(df, positive_cutoff, negative_cutoff, target_col, exclude = []):
strong_pos = df.index[df.loc[:, target_col] > positive_cutoff]
strong_neg = df.index[df.loc[:, target_col] < negative_cutoff]

# Drop excluded features
for item in exclude:
if (exclude in list(strong_pos)):
strong_pos = strong_pos.drop(exclude)
if (exclude in list(strong_neg)):
strong_neg = strong_neg.drop(exclude)
return strong_pos.tolist(), strong_neg.tolist()


### train_and_test_kneighbors¶

This function automates fitting and testing of a k_nearest_neighbors model.

Parameters

• train_df = the dataframe used for training the model
• test_df = the dataframe used to validate the model
• fit_params = a list of the names of columns to be used to fit the model
• target_param = the parameter the model attempts to predict
• num_neighbors = the number of neighbors to use in the model
• k = the number of subsets to split the data into for KFold validation

Returns

• rmse = the average root mean squared error amongst the KFold subsets
• stdev = the standard deviation of the rmse values obtained for the KFold subsets
In [6]:
def train_and_test_kneighbors(train_df, test_df, fit_params, target_param, num_neighbors = 5, k = 2):
total_df = pd.concat([train_df, test_df], axis = 0)

kf = KFold(k, shuffle = True, random_state = 1)
knn = KNeighborsRegressor(n_neighbors = num_neighbors)

mses = cross_val_score(knn, total_df[fit_params], total_df[target_param],
scoring = 'neg_mean_squared_error', cv = kf)
rmses = np.absolute(mses) ** 0.5

return np.mean(rmses), np.std(rmses)


### train_and_test_linear_regression¶

This function automates fitting and testing of a linear_regression model.

Parameters

• train_df = the dataframe used for training the model
• test_df = the dataframe used to validate the model
• fit_params = a list of the names of columns to be used to fit the model
• target_param = the parameter the model attempts to predict
• k = the number of subsets to split the data into for KFold validation

Returns

• rmse = the average root mean squared error amongst the KFold subsets
• stdev = the standard deviation of the rmse values obtained for the KFold subsets
In [7]:
def train_and_test_linear_regression(train_df, test_df, fit_params, target_param, k = 0):
total_df = pd.concat([train_df, test_df], axis = 0)

kf = KFold(k, shuffle = True, random_state = 1)
lr = LinearRegression()

mses = cross_val_score(lr, total_df[fit_params], total_df[target_param],
scoring = 'neg_mean_squared_error', cv = kf)
rmses = np.absolute(mses) ** 0.5

return np.mean(rmses), np.std(rmses)


## Data Cleaning¶

### General Data Cleaining¶

In [8]:
data_transform = transform_features(data_copy, transform_dictionary)

===============================================
===== Successfully remapped the dataframe =====
===============================================
['MS SubClass', 'MS Zoning', 'Street', 'Lot Shape', 'Alley', 'Utilities', 'Lot Config', 'Land Slope', 'Neighborhood', 'Condition 1', 'Condition 2', 'Bldg Type', 'Exter Qual', 'Roof Style', 'Roof Matl', 'Exterior 1st', 'Exterior 2nd', 'Foundation', 'Bsmt Cond', 'Bsmt Exposure', 'BsmtFin Type 1', 'BsmtFin Type 2', 'Heating', 'Heating QC', 'Central Air', 'Electrical', 'Kitchen Qual', 'Functional', 'Fireplace Qu', 'Garage Type', 'Garage Qual', 'Paved Drive', 'Pool QC', 'Fence', 'Sale Condition', 'Mo Sold']

====================================================================
===== Dropped 3 columns after converting them to nominal data. =====
====================================================================
['Year Remod/Add', 'Garage Yr Blt', 'Year Built']

=======================================================================================
===== Dropped 11 columns after combining them into summative quantitative columns =====
=======================================================================================
['Total Bsmt SF', '1st Flr SF', '2nd Flr SF', 'Open Porch SF', 'Enclosed Porch', '3Ssn Porch', 'Screen Porch', 'Bsmt Full Bath', 'Full Bath', 'Bsmt Half Bath', 'Half Bath']

================================================================
===== Dropped 24 columns after converting them to dummies. =====
================================================================
['MS SubClass', 'MS Zoning', 'Street', 'Alley', 'Lot Shape', 'Utilities', 'Lot Config', 'Land Slope', 'Bldg Type', 'Roof Style', 'Roof Matl', 'Foundation', 'Bsmt Exposure', 'Heating', 'Electrical', 'Functional', 'Garage Type', 'Paved Drive', 'Fence', 'Mo Sold', 'Yr Sold', 'Sale Condition', 'Fireplace Qu', 'Neighborhood']

==================================================================================
===== Dropped 6 columns after converting them to dummies and combining them. =====
==================================================================================
['Condition 1', 'Condition 2', 'BsmtFin Type 1', 'BsmtFin Type 2', 'Exterior 1st', 'Exterior 2nd']

=====================================================================================
===== Dropped 2 columns that contained uncategorizable and unquantifiable data. =====
=====================================================================================
['Order', 'PID']

=================================================================================
===== Dropped 12 columns which contained data represented in other columns. =====
=================================================================================
['Exter Cond', 'Garage Finish', 'Garage Cond', 'Bsmt Unf SF', 'Bsmt Qual', 'Garage Cars', 'BsmtFin SF 1', 'BsmtFin SF 2', 'House Style', 'Gr Liv Area', 'TotRms AbvGrd', 'Land Contour']

=======================================================================
===== Dropped 5 columns which did not contain useful information. =====
=======================================================================
['Mas Vnr Type', 'Mas Vnr Area', 'Sale Type', 'Misc Feature', 'Low Qual Fin SF']

=========================================================================
===== Dropped 3 categorical columns which contained no information. =====
=========================================================================
['Exterior_Other', 'Exterior_WoodShingles', 'Condition_SalvageOnly']

====================================================
===== After cleaning there are 82 data columns =====
====================================================


### Removing outliers¶

I am interested in predicting prices of 'average' homes in Ames, so removing houses that fall outside of the 'average' category is important to avoid skewing our model. To identify outlying datapoints, I plotted histograms of three important characteristics of each house: price, house square footage, and lot size.

In [9]:
def plot_outliers(data_, name, num_stdev):
[mean, stdev] = [np.mean(data_), np.std(data_)]
[plus_three, minus_three] = [mean + 3 * stdev, mean - 3 * stdev]
range_ = plus_three - minus_three

# Generate plot
ax = sns.histplot(data_, binwidth = (range_)/40, edgecolor = 'black')
ax.set_xlim(0, mean + 5 * stdev)
ax.set_yscale('log')

# Annotate plot (vertical line for mean and +/- 3 standard deviations)
text_y = ax.get_ylim()[1] * 0.7
[text_x1, text_x2] = [minus_three + 0.03 * range_, plus_three - 0.2 * range_]

ax.axvline(x = mean, color = 'black', linestyle = '-')
ax.text(mean + 0.01 * (plus_three - minus_three), text_y, 'Mean', fontsize = 'large', fontweight = 'bold')

ax.axvline(x = plus_three, color = 'red', linestyle = '--')
ax.text(text_x2, text_y, '+3Ïƒ', color = 'red', fontsize = 'large', fontweight = 'bold')

if(text_x1 > 0):
ax.text(text_x1, text_y, '-3Ïƒ', color = 'red', fontsize = 'large', fontweight = 'bold')
ax.axvline(x = minus_three,
color = 'red', linestyle = '--')
#     ax.set(title = name)
plt.title(name, size = 15)
outliers = (data_ < minus_three) | (data_ > plus_three)
return outliers

In [10]:
plt.subplots(1, 3, figsize = [15, 4])
plt.subplot(1, 3, 1)
sf_outliers = plot_outliers(data_transform['Total SF'], 'Square Footage Outliers', 3)

plt.subplot(1, 3, 2)
price_outliers = plot_outliers(data_transform['SalePrice'], 'Price Outliers', 3)
plt.subplot(1, 3, 3)
lot_area_outliers = plot_outliers(data_transform['Lot Area'], 'Lot Area Outliers', 3)
plt.show()


There are a number of houses that have either square footage, price, or lot area 3Ïƒ outside the mean. We can safely discard these listings as outliers.

In [11]:
# Combine individual outlier datasets
all_outliers = sf_outliers | price_outliers | lot_area_outliers
message = f'===== {sum(all_outliers)} outliers identified and removed ====='
print(f'{"=" * len(message)}\n{message}\n{"=" * len(message)}')

# Drop outliers
data_transform = data_transform.loc[~all_outliers, :]

==============================================
===== 75 outliers identified and removed =====
==============================================


## Identifying columns for use in the model¶

### plot_corrs¶

Parameters

• corrs = the dataframe containing all correlations in this dataset
• cols_to_plot = a list of the names of columns that are going to be plotted
• comparison_col = the name of the column against which the cols_to_plot will be correlated
• chart_rows = the number of individial rows to split the resulting plot into
• chart_cols = the number of indivicual columns to split the resulting plot into
• fig_width = the width of the final figure
• fig_height = the height of the final figure

Returns

• Produces and displays a heatmap
In [12]:
def plot_corrs(corrs, cols_to_plot, comparison_col, chart_rows, chart_cols, fig_width = 10, fig_height = 10):
num_corrs = len(cols_to_plot)
corrs_per_cell = int(np.round_(num_corrs/(chart_rows * chart_cols)))
fig, ax = plt.subplots(chart_rows, chart_cols, figsize=(fig_width, fig_height))

subplot_num = 1
show_cbar = False
# For each subplot
for col in range(1, chart_cols + 1):
for row in range(1, chart_rows + 1):
start_index = (subplot_num - 1) * corrs_per_cell
end_index = start_index + corrs_per_cell

# Ensure we are not exceeding the bounds of our dataset
if (end_index >= len(cols_to_plot)):
end_index = len(cols_to_plot)
elif (end_index + corrs_per_cell) > len(cols_to_plot) + 1:
end_index = len(cols_to_plot)
if (col == chart_cols) & (row == chart_rows):
show_cbar = True

cell_cols = []
for k in range(start_index, end_index):
cell_cols.append(cols_to_plot[k])

# Plot the appropriate correlation values in this subplot
plt.subplot(chart_rows, chart_cols, subplot_num)
sns.heatmap(pd.DataFrame(corrs.loc[cell_cols, comparison_col]), cmap = 'coolwarm', square = True,
vmin = -1, center = 0, vmax = 1, annot = True, cbar = show_cbar)
subplot_num += 1
plt.show()


### drop_cols¶

Parameters

• df - the DataFrame from which to drop columns
• col_group - a string describing the group of columns that are being dropped
• current_cols - a string array containing the names of columns that were analyzed
• cols_to_keep - a string array containing the names of columns that should be kept

Returns

• df - the updated DatFrame
In [13]:
def drop_cols(df, col_group, current_cols, cols_to_keep):
# Keep requested columns
cols_to_drop = current_cols
for col in cols_to_keep:
cols_to_drop.remove(col)

# Drop columns
df = df.drop(cols_to_drop, axis = 'columns')

# Print out results
message = f'===== {len(cols_to_drop)} {col_group} columns were removed from analysis ====='
print(f'{len(message) * "="}\n{message}\n{len(message) * "="}\n')
print(cols_to_drop)
message = f'===== {df.shape[1]} columns remain ====='
print(f'\n{len(message) * "="}\n{message}\n{len(message) * "="}')

return df


With 202 columns, choosing which ones to use for our model is a major challenge. In addition to choosing columns that predict the SalePrice accurately, there are several common pitfalls we need to avoid:

1. Collinarity - utilizing columns that are closely related to each other in a model (for example, Total square feet and 1st floor square feet)
2. Overstratification - this dataset contains many categorical columns. Over utilization of these columns could lead to creation of data subsets that do not have enough values to produce estimations with any statistical significance
3. Data Leakage - feature engineering can lead to incorporation of information that is not inherent to the dataset, thereby reducing the model's accuracy.

First, lets examine how each of the 202 columns in the dataset correlate with SalePrice.

In [14]:
correlations = data_transform.corr()

In [15]:
plot_corrs(correlations, correlations.columns.tolist(), 'SalePrice', 1, 5, 20, 20)


With 202 values, a single heatmap is impossible to interpret. Instead, lets break the correlations out into smaller groups.

### Vital Statistics¶

When looking for a house, there are several numbers that typically drive a purchase. These "vital statistics" include the number of bedrooms, number of bathrooms, and the square footage of the house.

In [16]:
vital_cols = ['Total SF', 'Bedroom AbvGr', 'Bathrooms']
plot_corrs(correlations, vital_cols, 'SalePrice', 1, 3, 10, 2)


The strongest predictor of price amongst a home's vital statistics is the total square footage of the house. After that, the number of bathrooms (which is in part related to the total square footage) is the strongest indicator.

All of these values are important factors in home price, but it is important to note that number of bedrooms and number of bathrooms does correlate with SalePrice. Despite this collinearity, I kept all three columns for use in the model

### Quality Metrics¶

The Ames, IA dataset provides us with several "quality metrics" which roll many different factors into one number.

In [17]:
quality_metric_cols = ['Exter Qual', 'Garage Qual', 'Bsmt Cond',
'Overall Cond', 'Kitchen Qual', 'Overall Qual']
functional_cols = data_transform.columns[data_transform.columns.str.contains('Condition')].tolist()
quality_metric_cols = quality_metric_cols + functional_cols
plot_corrs(correlations, quality_metric_cols, 'SalePrice', 1, 5, 20, 1)


Kitchen quality, exterior quality, and Overall Quality are strongly correlated with higher home prices. Surprisingly, the "Functional" condition of the house does not have a strong correlation with house price other than typical functionality predicts a higher price than any reduced functionality.

In [18]:
data_transform = drop_cols(data_transform, 'Quality Metrics', quality_metric_cols, ['Exter Qual', 'Kitchen Qual'])

================================================================
===== 9 Quality Metrics columns were removed from analysis =====
================================================================

['Garage Qual', 'Bsmt Cond', 'Overall Cond', 'Overall Qual', 'Condition_MajorProblems', 'Condition_MinimalProblems', 'Condition_ModerateProblems', 'Condition_SevereProblems', 'Condition_Typical']

==============================
===== 193 columns remain =====
==============================


### Neighborhood¶

Examining the correlation between neighborhood and sales price, we are confronted with two problems:

1. Insufficient datapoints in certain neighborhoods (Green Hill has 2 sales; Landmark, 1)
2. Potential collinearity between neighborhoods (Northridge/Northridge Heights)
In [19]:
neighborhoods_original = data.loc[~all_outliers, ['Neighborhood', 'SalePrice']]
neighborhoods_map = transform_dictionary['Neighborhood']
plt.subplots(1, 1, figsize = [18, 5])
sns.stripplot(data = neighborhoods_original, x = 'Neighborhood', y = 'SalePrice')
x = plt.xticks(rotation = 60)
x = plt.title('Sale Prices by Neighborhood', size = 20)


Even with these problems, it does appear that there is a relationship between neighborhood and SalePrice. This is not surprising, since location can often drive real estate prices more strongly than house characteristics.

To circumvent the issues of insufficient data and collinearity, I grouped neighborhoods geographically, assuming that 'areas' of the city would have similar property values and desirabilities. Using a survey map of Ames, Iowa, I divided the 26 neighborhoods into 10 geographic groups as shown below: