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4 views

sample Report 1

Uploaded by

Hemant Chaudhari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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House Price Prediction Using Machine Learning

1. Introduction
1.1 Problem Statement:

House Price Prediction is an essential aspect of the real estate industry, helping buyers, sellers,
and investors make informed decisions. The price of a house depends on multiple factors such
as location, size, number of rooms, availability of amenities, and overall market trends.
Predicting house prices accurately can benefit real estate agencies, financial institutions, and
individuals looking to buy or sell properties. However, due to market fluctuations and
numerous influencing factors, estimating prices remains a challenging task. This study aims to
develop a predictive model that can estimate house prices with high accuracy using machine
learning techniques.

1.2 Objectives:

The primary objective of this research is to build an efficient house price prediction model that
leverages machine learning algorithms to analyze various property features. The study aims to
identify the most significant factors affecting house prices and optimize the model’s accuracy
through effective data preprocessing and feature selection. Additionally, the research focuses
on evaluating different machine learning models to determine the most suitable approach for
prediction. The ultimate goal is to provide a reliable tool that can assist stakeholders in the real
estate sector with accurate price estimation.

1.3 Scope:

The scope of this study includes collecting and analyzing real estate data consisting of historical
house prices, location-specific details, property attributes, and economic indicators. Various
machine learning models such as regression algorithms, decision trees, and deep learning
approaches are explored to identify the best-performing model for prediction. The system is
designed to be applicable to different real estate markets, with potential integration into web-
based applications for ease of use. While this study focuses on structured datasets, future work
may involve incorporating additional dynamic factors such as real-time market fluctuations
and economic trends to enhance prediction accuracy.

Post Graduate Diploma in AI & DS, GHRCEM, Pune | 1


House Price Prediction Using Machine Learning

2. Methodology

The methodology involves several key steps, starting with data collection from a reliable
source. In this study, we use the California Housing dataset, which includes information on
house prices and features such as median income, number of rooms, and geographical location.
The data is preprocessed to handle missing values, remove inconsistencies, and normalize
features for better model performance. Categorical variables are encoded appropriately to
ensure compatibility with machine learning algorithms.

A Random Forest Regressor model is selected for training due to its efficiency in handling
complex relationships between features and the target variable. The dataset is split into training
and testing subsets in an 80:20 ratio. Features are standardized using a scaler to improve the
model's performance. The model is then trained and evaluated using standard performance
metrics such as Mean Absolute Error (MAE), Root Mean Squared Error (RMSE), and R-
squared (R²) to assess the prediction accuracy. The model with the best performance is selected
for potential deployment.

Post Graduate Diploma in AI & DS, GHRCEM, Pune | 2


House Price Prediction Using Machine Learning

3. Results & Discussions

The trained model is evaluated using the test dataset, and the following results are obtained:

 Mean Absolute Error (MAE): 0.33


 Root Mean Squared Error (RMSE): 0.49
 R-Squared (R²): 0.81

The results indicate that the model performs well, achieving an R² value of 0.81, which means
that 81% of the variance in house prices can be explained by the selected features. The low
MAE and RMSE values demonstrate that the model's predictions are close to the actual values,
making it a reliable tool for house price estimation. The analysis of feature importance reveals
that median income, house age, and the number of rooms are the most significant factors
influencing house prices.

Despite the promising results, some limitations exist. The model may not generalize well to
different regions where housing market conditions differ significantly. Additionally, external
economic factors such as inflation, interest rates, and real estate regulations are not included in
this dataset, which may impact the accuracy of predictions. Future enhancements could involve
incorporating real-time market data and advanced deep learning models to improve prediction
reliability.

Post Graduate Diploma in AI & DS, GHRCEM, Pune | 3


House Price Prediction Using Machine Learning

4. Conclusion

In conclusion, this study successfully develops a machine learning-based model for house price
prediction. The results indicate that data quality and feature selection play a crucial role in
determining the accuracy of predictions. By implementing and comparing multiple models, the
study identifies the most suitable approach for real estate price estimation. The research also
highlights the need for continuous improvements, such as integrating real-time data and
additional economic factors, to enhance model reliability. This predictive system has
significant practical applications in real estate businesses, helping stakeholders make informed
decisions based on data-driven insights. Future research can focus on expanding the dataset,
incorporating advanced deep learning techniques, and optimizing the model for real-time price
prediction.

Post Graduate Diploma in AI & DS, GHRCEM, Pune | 4

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