Extracting Features from Satellite Imagery to Understand the Size and Scale of Housing Sub-Markets in Madrid

Abstract

The following paper proposes a novel machine learning approach to the segmentation of urban housing markets. We extract features from globally available satellite imagery using an unsupervised machine learning model called MOSAIKS, and apply a k-means clustering algorithm to the extracted features to identify sub-markets at multiple intra-urban scales within a case study of Madrid (Spain). To systematically explore scale effects on the resulting clusters, the analysis is repeated with varying sizes of satellite image patches. We assess the resulting clusters across scales using several internal cluster-evaluation metrics. Additionally, we use data from online listings portal Idealista to measure the homogeneity of housing prices within the clusters, to understand how well sub-markets can be differentiated by the image features. This paper evaluates the strengths and weakness of the method to identify urban housing sub-markets, a task which is important for planners and policy makers and is often limited by a lack of data. We conclude that the approach seems useful to divide large urban housing markets according to different attributes and scales.