Econ 203 Project 2 - Graded Project II You have submitted...

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Graded Project II You have submitted this Homework 2 times (including this time). You may submit this Homework a total of 30 times and receive full credit. One of the problems that appraisers of real estate face is the lack of sufficient data. However, over the last few years they can avail enormous data banks of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) that has substantially reduced the problem of data availability. The data on millions of transactions in which these secondary mortgage market organizations are involved are now stored and available online to lenders and appraisers. The models and procedures that will govern the application of these data sources are now largely developed and will undoubtedly lead to major changes both in the scope of the residential appraisal function and in the way that residential appraisals are conducted. Multiple regression analysis is very useful in estimating models for appraising rents for one-to four-family residences as well other properties where substantial data on a large number of transactions are available. The independent variables that theory suggest include categorical variables like whether the apartment has a dishwasher (DSHWSHER=1), a tennis court in the complex (TENISCRT=1), a sauna in the complex (SAUNA=1), whether the apartment is for yearly lease only (YRLYLEAS=1), are there some extra utilities like ethernet connections and laundry services (XTRAUTIL=1), if the apartment is in a poor neighborhood (POORNBHD=1), whether utilities are included (UTLITIES=1), whether the apartment is furnished (FURNSHED=1) and the type of apartment (efficiency, one-,two-, three-, four- bedrooms). In the data the most commonly occurring type apartment was one-bedroom. Besides those characteristics the apartment rate also depends on the number of baths per bedroom (BTHPERBD), average square feet per bedroom (BDRMSIZE) and a measure of location in number of miles from city center (LOCATION). You collected the data on rent and the physical characteristics of 300 one- to four- roomed apartments that were appraised. Answer the following questions based on the dataset you can download from here .
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This note was uploaded on 04/07/2008 for the course ECON 203 taught by Professor Petry during the Spring '08 term at University of Illinois at Urbana–Champaign.

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Econ 203 Project 2 - Graded Project II You have submitted...

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