Introduction

Today, we all are surrounded by humans who can learn everything from their experiences with
their learning capability. Also, we have computers or machines which work on the instructions
given by the humans . But can a machine also learn from experiences or past data like a human
does? Yes, it could be done with the help of Machine Learning. It enables in building of a system
that learns from historical data, builds prediction models, and whenever it receives new data,
predicts the output for it.

The same approach of machine learning can be used for the prediction of house prices
considering different factors. The prediction of prices of house is crucial for driving the real
estate efficiency. It also helps in suggesting the priority taken by the pupils in taking a house (i.e.
location, price, size, etc.).
 Attributes/Features for House Price Prediction

We shall be using thirteen continuous attributes and one binary-valued attribute.

1. CRIM- per capita crime rate by town

2. ZN- proportion of residential land zoned for lots over 25,000 sq. Ft.

3. INDUS- proportion of non-retail business acres per town

4. CHAS- Charles River dummy variable (= 1 if tract bounds river; 0 otherwise)

5. NOX- nitric oxides concentration (parts per 10 million)

6. RM- average number of rooms per dwelling

7. AGE- proportion of owner-occupied units built prior to 1940

8. DIS- weighted distances to five Boston employment centers

9. RAD- index of accessibility to radial highways

10. TAX- full-value property-tax rate per $10,000

11. PTRATIO- pupil-teacher ratio by town

12. B- 1000(Bk - 0.63)^2 where Bk is the proportion of blacks by town

13. LSTAT- % lower status of the population

14. MEDV- Median value of owner-occupied homes in $1000's

 Machine Learning

Machine Learning is said as a subset of artificial intelligence that is mainly concerned with the
development of algorithms which allow a computer to learn from the data and past experiences
on their own. The term machine learning was first introduced by Arthur Samuel in 1959. With
the help of sample historical data, which is known as training data, machine learning algorithms
build a mathematical model that helps in making predictions or decisions without being
explicitly programmed. Machine learning brings computer science and statistics together for
creating predictive models. Machine learning constructs or uses the algorithms that learn from
historical data. The more we will provide the information, the higher will be the performance.

A Machine Learning system learns from historical data, builds the prediction models, and
whenever it receives new data, predicts the output for it. The accuracy of predicted output
depends upon the amount of data, as the huge amount of data helps to build a better model which
predicts the output more accurately.

Features of Machine Learning:

o Machine learning uses data to detect various patterns in a given dataset.

o It can learn from past data and improve automatically.

o It is a data-driven technology.

o Machine learning is much similar to data mining as it also deals with the huge amount of
the data.
Need for Machine Learning

The need for machine learning is increasing day by day. The reason behind the need for
machine learning is that it is capable of doing tasks that are too complex for a person to
implement directly. As a human, we have some limitations as we cannot access the huge
amount of data manually, so for this, we need some computer systems and here comes
the machine learning to make things easy for us.
 Errors by Applied Regressions

1. Decision Tree:

Mean: 4.401682196186962

Standard Deviation: 0.8044184021527258

2. Linear Regression:

Mean: 5.0297491662005145

Standard Deviation: 1.060631438626313

3. Random Forest Regression:

Mean: 3.3034899889360076

Standard Deviation: 0.7030527780119353

 Significance and Future Scope of the Project

Significance

 It helps the real estate agencies in earning the profits. As earlier, house prices were
determined by calculating the acquiring and selling price in a locality. Therefore, the
house price prediction model is very essential in filling the information gap and improve
real estate efficiency.
 It helps the developer in determining the selling price of the house.
 It also helps the customer the right time to purchase a house as he/she can compare the
price sets of the same place for the different time spans.

Future Scope
 The following project can be extended to a hardware counterpart (i.e. a machine could be
developed consisting of such model), so that it can be accessible by the public with more
ease.
 Till now, the model predicts the price of the house considering 13 factors only, with the
increase in the application of the model, more factors on which the price of the house
depend, can be included in the same.
 The dataset can be made universal, such that it gets changed as per the real environment
by means of some software or an organization so that the need of technical knowledge for
repetitively changing the data sets can be avoided.