California is located in the Pacific Region in the U.S. Among counties, Los Angeles is the most populous counties in California, and the second-most populous county in the U.S. With the rapid growth of the counties over the decades, the increasing housing price is an inevitable issue for most of the Californians. Based on the Bloomberg report, the median house value in California is over 600,000 dollars, which is more than twice the national level. For both renters and owners, hosing is a huge burden. According to the report, they have to pay more than 30% of their income on housing. The objectives in this project were to investigate if the residential real estate prices are associated with location, are there any autocorrelation between each county. Furthermore, other covariates such as median age, rent as percentage of income, and race were added to the prediction model to examine any trend.
California Data used in this project were extracted from the census data (2013-2017) from the National Historical Geographic Information System (NHGIS). There are two components of the data including shapefile and census data. Shapefile included California geographic information that was extracted with county boundaries. Housing data including median gross rent and median house values were obtained. Median gross rent was defined as the monthly agreed or contracted rent plus estimated utility fees. Median house values stand for the median house prices that were on the market in 2017. Covariate data including median gross rent as a percentage of household income, race, age, and sex, were also extracted from the 2017 NHGIS database. Median gross rent as a percentage of household income was the proportion of the median gross rent divided by the median household income. In our project, it was categorized as the following: Less than 10%, 10-20 %, 20-30%, 30-40%, and 40-50%. The race was a categorical variable that was comprised of six categories: White alone, Black or African American alone, American Indian and Alaska Native alone, Asian alone, Native Hawaiian and Other Pacific Islander alone, Some other race alone. In this project, the race was calculated as a percentage divided by the total number of races. The age variable was extracted in terms of median age.