Using machine learning algorithms for housing price prediction: The case of Fairfax County, Virginia housing data

Abstract

House sales are determined based on the Standard & Poor’s Case-Shiller home price indices and the housing price index of the Office of Federal Housing Enterprise Oversight (OFHEO). These reflect the trends of the US housing market. In addition to these housing price indices, the development of a housing price prediction model can greatly assist in the prediction of future housing prices and the establishment of real estate policies. This study uses machine learning algorithms as a research methodology to develop a housing price prediction model. To improve the accuracy of housing price prediction, this paper analyzes the housing data of 5359 townhouses in Fairfax County, Virginia, gathered by the Multiple Listing Service (MLS) of the Metropolitan Regional Information Systems (MRIS). We develop a housing price prediction model based on machine learning algorithms such as C4.5, RIPPER, Naïve Bayesian, and AdaBoost and compare their classification accuracy performance. We then propose an improved housing price prediction model to assist a house seller or a real estate agent make better informed decisions based on house price valuation. The experiments demonstrate that the RIPPER algorithm, based on accuracy, consistently outperforms the other models in the performance of housing price prediction.