0
$\begingroup$

I have a set of real estate data; historic sales price, square meters, location (latitude, longitude), neighbourhood, city, sold date and bunch of other features. I have used a boosting model to estimate the price of an individual house. I would like to estimate the price of a house 1 month ahead; but this requires extrapolating and something boosting is not capable of.

For this reason, I am trying to create inflation adjusted houses prices which will be fed into the boosting model. Old sale prices will therefore be inflation adjusted to 1 month ahead. This way I can capture inflation, and extrapolate over time. My objective is to create a separate model that can capture local changes in housing prices and extrapolate them forward. Essentially a price index.

I have aggregated the data at a city level by taking the median price per square meter for each month. The data exhibits strong AR characteristics. However, when I try this same approach on a neighbourhood (more local) level the AR characteristics disappear. I am unfortunately limited to 2 years of data.

What approach would you suggest to modelling a local price index that can be extrapolated with such a dataset? Kriging appears to be powerful, but is not made for extrapolation..

$\endgroup$

1 Answer 1

1
$\begingroup$

Isn't this an ML practice problem?

https://towardsdatascience.com/machine-learning-project-predicting-boston-house-prices-with-regression-b4e47493633d

$\endgroup$
4
  • $\begingroup$ Thanks for the reply. No, its not. I want to create a local price index that can be used to make forecasts into the future. $\endgroup$ Jun 25, 2021 at 7:23
  • $\begingroup$ If that's the case, you can look at how the FHFA defines HPI: fhfa.gov/PolicyProgramsResearch/Research/Pages/… $\endgroup$
    – VVKK77
    Jun 25, 2021 at 17:20
  • $\begingroup$ Old approach + based on repeat sales. I don't have repeat sales.. $\endgroup$ Jun 29, 2021 at 16:00
  • $\begingroup$ What is "historic sales price" then? Not sure why you're being critical of an "old approach" that is still consistently used in the housing market. Take a look at Zillow's definition, might help you. zillow.com/research/data Good luck with your problem. $\endgroup$
    – VVKK77
    Jun 29, 2021 at 22:51

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge that you have read and understand our privacy policy and code of conduct.

Not the answer you're looking for? Browse other questions tagged or ask your own question.