NYC Real Estate- Baychester

Hsin Fang Hu

AD571 Prof. David Ritt

CONTENTS

1. Goal & Necessary Data
2. Model development & validation
3. Model deployment
4. Model monitoring & improvement
5. Company value
6. Next Step

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AD571 Real Estate Analysis _ Hsin

1. Goal & Necessary Data

Business Goal & Model Goal

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Whether to open up an office for the Baychester?

Predict the sales of Baychester in the next two years and calculate the possible value of the maximum profit.

Necessary Data

This report will use the historical data table of real estate transaction data.

AD571 Real Estate Analysis _ Hsin

2. Model development & validation

Neighborhood - Baychester

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Total Sales Price

Sales Units

AD571 Real Estate Analysis _ Hsin

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Regression forecast Model – time predictor (R² = 0.64)

Time Series Model

AD571 Real Estate Analysis _ Hsin

3. Model deployment

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Optimization Model – Maximum Profit

AD571 Real Estate Analysis _ Hsin

The greatest profit: Reducing the commission by 0.07% and have 3 employees.

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Adjusted Market Penetration (MP)

= 5.5% + Increased MP% due to reduced commission + Increased MP% by hiring employees

+ Increased MP% through marketing spending

Revenue

AD571 Real Estate Analysis _ Hsin

4. Model monitoring & improvement

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Monitoring

We can compare the actual sales figures in 2022 with the forecasted values, and first examine the accuracy of the forecasted values.

Then check the rationality of the market penetration rate and commission ratio, and fine-tune the ratio.

Improvement

With the previous monitoring data, we can improve the prediction model and optimization model. Making it feasible and profitable to open an office in Baychester.

AD571 Real Estate Analysis _ Hsin

5. Company Value

Contribution

Assessing neighborhood potential

At the beginning, we know that we have to focus on the residential type, and then evaluated whether Baychester has the potential to make profits through the sales forecast value and optimization model.

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ROI rate

66.23%

AD571 Real Estate Analysis _ Hsin

6. Next Step

Choose Baychester?

Manpower

Considering the actual situation, if the company has only three employees, it may cause a shortage of manpower.

Potential risks

We should conduct a more detailed analysis of potential risks and changes in the current market environment.

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Only then can we make the decision whether to open a real estate office in Baychester.

AD571 Real Estate Analysis _ Hsin

Other neighborhoods

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In the chart and T-test, we can see that Kips Bay's average price of one square foot is much higher than Baychester.

AD571 Real Estate Analysis _ Hsin

Thank you

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