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1.

Introduction
Gulf Real Estate Properties, Inc., expert in the real estate market want to analysis sales of real estate
property. The real estate firm located in Southwest Florida, monitors condominium sales by collecting data on
the location, list price, sale price, and number of days it takes to sell. The location of condominium is
classified by two types as Gulf View and No Gulf View. The Gulf View is located directly on the Gulf
of Mexico and the No Gulf view is located on the bay or a golf course, near but not on the gulf. Recent
sample sales data for 90 Gulf view condominiums and 50 No Gulf view condominiums were collected
from data of sales from Naples, Florida. The objective is to come up with an estimate of the final selling price
and number of days to sell the when the list price for Gulf view and No Gulf View condominiums are
given. We will be using descriptive statistics to give an idea to real estate agent about how the condominium
market is. We will also be using percentage confidence interval estimation method to find the sample data
mean in relation to the census mean of list prices and average days took to sell each type of condominiums.

2. Data Analysis
2.1 Gulf View Condominiums Statistics
Ref to Table 1

2.1.1 List Price Variable


Average listing price for Gulf view condominiums as per sample date is $ 474,828.89. Minimum
price listed is $ 169,900.00 and maximum price listed is $ 975,000.00.

2.1.2 Sale Price Variable

By

Average sale price for Gulf view condominiums as per sample date is $ 455,742.22. Minimum selling
price is $ 165,000.00 and maximum selling price is $ 975,000.00.
Stats Bros
Rafael Aita Junek
Krishna Chaitanya Tummala

2.1.3 Days to sell Variable


Average number of days to sell a Gulf view condominium as per sample date is 106 days. Least
number of days to sell a gulf view condominium is 28 days. Maximum number of days to sell a gulf view
condominium is selling price is 282 days.

2.2 No Gulf View Condominiums Statistics


Ref to Table 2

2.2.1 List Price Variable


Average listing price for No Gulf view condominiums as per sample date is $ 214,460.00. Minimum
price listed is $ 148,000.00 and maximum price listed is $ 322,000.00.

2.2.2 Sale Price Variable


Average sale price for No Gulf view condominiums as per sample date is $ 204,474.00. Minimum
selling price is $ 135,500.00 and maximum selling price is $ 292,500.00.

2.2.3 Days to sell Variable


Average number of days to sell a No Gulf view condominium as per sample date is 129 days. Least
number of days to sell a No Gulf view condominium is 48 days. Maximum number of days to sell a No gulf
view condominium is selling price is 338 days.
The tables below are a representation of descriptive statistics of the sample data given
Gulf View Condominiums
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Skewness
Range
Minimum
Maximum
Sum
Count

List Price
$
474,828.89
20564.91
$
435,000.00
$
469,000.00
195095.88
38062403425.72
1.06
805100
$
169,900.00
$
975,000.00
$ 42,734,600.00
90

Sale Price
$
455,742.22
20133.13
$
410,000.00
$
305,000.00
190999.63
36480858871.41
1.11
810000
$
165,000.00
$
975,000.00
$ 41,016,800.00
90

Days to Sell
105.99
5.49
96
85
52.13
2717.13
0.94
254
28
282
9539
90

Table 1 Gulf View Condominiums descriptive statistics

No Gulf View Condominiums


Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Skewness
Range
Minimum
Maximum
Sum
Count

List Price
$ 214,460.00
6913.87
$ 212,500.00
$ 279,000.00
48888.44
2390079183.67
0.47
174000.00
$ 148,000.00
$ 322,000.00
$ 10,723,000.00
50

Sale Price
$ 204,474.00
6148.49
$ 203,500.00
$ 230,000.00
43476.41
1890197881.63
0.29
157000.00
$ 135,500.00
$ 292,500.00
$ 10,223,700.00
50

Days to Sell
129.32
10.09
122.00
150.00
71.36
5091.73
1.35
290
48
338
6466
50

Table 2 No Gulf View Condominiums descriptive statistics

2.3 Averages
In every category the condominiums with a gulf view outperformed the other condominiums. The mean
of the Gulf View Condominiums List Price and Sale Price are higher, and the number of days it takes to sell
the home is less. To simplify the Gulf View Condominiums sell for more and quicker.

Gulf view vs No Gulf view


$500.00
$400.00
Mean of list Prices

$300.00
$ In 000's

Mean of Sale Prices

$200.00

Mean of days to sell

$100.00
$1
Gulf View Condominiums

2
No Gulf view Condominiums

Fig 1 Mean comparison for Gulf view vs No Gulf view condominiums

Comparing data from Table 1 and Table 2 Gulf View Condominiums have a mean list price of $
474,828.89, while No Gulf View Condominiums have a mean of $ 214,460.00. The difference between these

two numbers could be argued that Gulf of Mexico views can increase a homes listing price by almost double
its current asking price. The average sale Price of the Gulf View Condominiums is $ 455,742.22, whereas the
No Gulf View Condominiums have an average of $ 204,474.00.The one statistic that No Gulf View
Condominiums do not want to have a higher value than the Gulf View Condominiums is the actual statistic
that they are higher on. When you are trying to sell a home, you do not want it to take forever. The No Gulf
View Condominiums takes a mean of 129.32 days to sell, compared to Gulf View Condominiums taking only
105.99 days. That is a difference of 23.33 days, a week shy of one month more to sell a condominium.
When you look at the difference of the List Price subtracted by the Sale Price, a real estate agent could
make it look in favor of the Gulf View Condominiums. The Gulf View Condominiums have a difference of $
19086.67, whereas the No Gulf View Condominiums is only $ 9,986.00. This difference makes it look like No
Gulf View Condominiums sell closer to their list price, but this is untrue. Instead of subtracting the mean Sale
Price from the List Price, and you divide the Sale Price by the List Price you get the percentile of the
difference. In doing this you learn that on average the Gulf View Condominiums retain 95.82% of their
listing price, whereas the No Gulf View Condominiums only retain 95.65%. So not only do the gulf view
homes list and sell for more quickly, but it also sells closer to their list value.

3. @95% confidence level


3.1 Gulf View Condominium
Developing 95% confidence interval estimate of the population mean sales price and population
mean number of days to sell for Gulf View condominiums. Large sample data given and population
standard deviation () is unknown.
Below are the calculations for finding 95% confidence interval estimate of the population mean
sales price and population mean number of days to sell.

Gulf View Condominiums


Sample Data ( n )

Sales Price

Days to sell
90

90

Sample Mean ( xx )
Standard Deviation ( s )
Confidence Level ( 1- )
Level of significance ( )
Degrees of Freedom ( n-1 )
t0.025 (t/2)

$ 455,742.22
190999.63
95%
5%
89
1.987

105.99
52.13
95%
5%
89
1.987

Table 3

Sale Price: The Formula for finding the mean interval for selling price of the sample with 95%
confidence interval estimate is as given below:

= xx [(t/2)* S/n]
= 455742.22 (1.987 x 190999.63/ 90)
= 455742.22 (40004.53)
= (415737.70, 495746.75)
So the interval is (415737.70, 495746.75)
With 95% confidence we can expect that the mean sale price for the population of Gulf view
condominiums is between $ 415737.70 and $ 495746.75.
Days to sell: Formula for finding mean interval for number of days to sell of the sample with 95%
confidence interval estimate is as given below:

= xx [(t/2)* S/n]
= 105.99 (1.987 x 52.13/ 90)
= 105.99 (10.92)
= (95.07, 116.91)
So the interval is (95.07, 116.91)
With 95% confidence we can expect that the average days to sell for the population of Gulf view
condominiums is between 95 days and 117 days.

3.2 No Gulf view Condominium

To develop the 95% interval for the population mean sales price and the population mean number
of days of No Gulf View Condominium, we will use the T-table since the standard deviation () is
unknown.
You can find below the table and calculations used to find the 95% interval of the population
mean sales price and the population mean number of days.
No Gulf View

Sales Price

Condominiums
Sample Data ( n )

Days to sell
50

50

$204,474.00

129.32

Standard Deviation ( s )

43476.41

71.36

Confidence Level ( 1- )

95%

95%

Level of significance ( )

5%

5%

49

49

2.01

2.01

Sample Mean ( xx )

Degrees of Freedom ( n-1 )

t0.025 (t/2)
Table 4

Sales price: The process to find the 95% interval for the sales price is shown below.

= xx [(t/2)* S/n]
= 204,474.00 (2.01 x 43476.41/ 49)
= 204,474.00 (12,483.94)
= (191,990.06, 216,957.94)
So the interval is (191,990.06, 216,957.94)
With 95% confidence we can expect that the mean sale price for the population of No Gulf view
condominiums is between $ 191,990.06 and $ 216,957.94.
Days to sell: The process to find the 95% interval for the days to sell is shown below.

= xx [(t/2)* S/n]
= 129.32 (2.01 x 71.36/ 49)
= 129.32 (20.4905)

= (108.83, 149.8)
So the interval is (108.83, 149.8)
With 95% confidence we can expect that the mean days to sale for the population of No Gulf
view condominiums is between 108.83 and 149.8 days.

4. Acquiring the sample size


To find the mean selling price of the two types of condominiums with the margin of errors
proposed by management, we are required to find the sample size that fits such margin of errors.
After finding the sample size, we can compute the mean selling price for both types of
condominiums.
The process to find the sample size of the Gulf view condominiums is shown below.
N = (2 *(Z/2)2) / E2

E stands for the desired margin of error.

is the population standard deviation taken with reference to sample data given.
N = (190999.632 * 1.962) / 400002
N = 87.59
A sample size of 88 is desirable for a margin of error of 40,000 at the 95% confidence level for
the Gulf view condominiums.
The process to find the sample size of the No Gulf view condominiums is shown below.
N = (2 *(Z/2)2) / E2

E stands for the desired margin of error.

is the population standard deviation taken with reference to sample data given.
N = (43476.412 * 1.962) / 150002
N = 32.27
A sample size of 32 is desirable for a margin of error of 15,000 at the 95% confidence level for
the No Gulf view condominiums.

5. Selling price and number of days estimate

We will be comparing list price sample data with the sales price and days to sell sample data
to estimate the selling price and no of days took to sell from list price given. Scatter plot will be
used to find the trends and the equation of trend line to know about the relationship between two
variable.
From the Appendix in pages 11 & 12 equations of the trend lines taken to calculate estimates
Estimated sale price for Gulf view given list price as $589,000.00
y = 0.9763x - 7815.2 => y= 0.9763*(589000)-7815.2
Estimate of final selling price = y= $ 567,225.50
Estimated no of days for Gulf view given list price as $589,000.00
y = 3E-05x + 91.257=> y=.000031(589000) +91.257
Estimate of final selling price = y= 109.52 days
Estimated sale price for No Gulf view given list price as $285,000.00
y = 0.8827x + 15164=> y= 0.8827*(285000) +15164
Estimate of final selling price = y= $ 266,733.5
Estimated sale price for No Gulf view given list price as $285,000.00
y = -0.00063x + 263.74=> y= -0.00063*(285000) +263.74
Estimate of final selling price = y= 84.19 days

6. Conclusion
Gulf Real Estate Property Inc. should take in account the following conclusions:

Even though the Gulf view condominiums are more expensive than the no Gulf view
condominiums, it takes 23 fewer days in average to sell the former more expensive

condominiums.
The sample size for the Gulf view condominiums should approximately stay the same
after taking in consideration the desired margin of error requested by management.

However, the sample size for the No gulf view should decrease to 34, in order to meet the

desired margin of error requested by management.


Since the data shows a higher demand for gulf view condominiums, the more expensive
real estate, and a lesser discount from listing price. Gulf Real Estate Property Inc. should
focus in listing more gulf view condominiums, increasing their inventory turnover and
profits.

I.

Appendix

Gulf View List Pice vs Sales Price


1200000
1000000
f(x) = 0.98x - 7815.15

800000

Sale Price in $

600000
400000
200000
0

500000

1000000

1500000

List Price In $

Gulf View List Price Vs no of days to sell


300
250
200

No of Days to sell

150
f(x) = 0x + 91.26

100
50
0
0

500000

1000000

List Price in $

1500000

No Gulf view List price vs Sale price


350000
300000

f(x) = 0.88x + 15164.1

250000
200000

Sale Price in $

150000
100000
50000
0
100000

150000

200000

250000

300000

350000

List Price in $

No gulf view List price vs days to sell


400
350
300
250

Days to sell

200
150

f(x) = - 0x + 263.74

100
50
0
100000

150000

200000

250000

List Price in $

300000

350000