Abstract
Residential real estate assumes crucial importance in a country's socioeconomic development. It is an important field of study, and much work has gone into better understanding the sector and the factors determining sales within it, such as time-on-the-market (TOM). TOM can be influenced by a variety of elements; a fact that in effect raises a lot of issues, because these determinants are often interpreted in an ambiguous or unstructured way. This study aims to bring greater accuracy and structure to our understanding of these factors, by showing that the integrated use of cognitive mapping with the Analytic Hierarchy Process (AHP) can give rise to a conceptually coherent and empirically valid framework to calculate TOM indices in the residential real estate market. Because it takes into account both tangible and intangible characteristics of a house, this measurement framework also boosts strategic planning support and allows for more informed business planning, which we believe can be a real contribution to the development of the real estate market. The practical implications and limitations of this evaluation system are also discussed.
Highlights
Housing can be a key element in the economic and social development of a region or country
This article adopts a constructive approach, based on methodologies that follow the fundamentals of the multiple criteria decision analysis (MCDA) approach, namely the integrated use of cognitive mapping techniques with the Analytic Hierarchy Process (AHP) developed by Saaty (1980)
Bana e Costa et al 1999; Belton, Stewart 2002; Ferreira et al 2011): (1) the structuring phase, which was concerned with identifying indicators and key determinants of the speed of real estate sales by means of applying cognitive maps; (2) the evaluation phase, which focused on the application of the AHP approach to define the relative and global importance of each indicator or determinant; and (3) the recommendations phase, which explored the integrated use of cognitive maps and AHP, as a means of adding value to existing practices
Summary
Housing can be a key element in the economic and social development of a region or country. Several studies, employing different methods and techniques, have been developed to try to understand the influence of a property’s time-onthe-market (TOM) on the real estate sector. Still, such studies have generally been met with the challenges of accessing information in the housing market, the heterogeneity of the market itself, and the complexity and confidentiality of its transactions. This article aims to overcome some of these limitations, by defining and building TOM indices for the real estate market, following a multiple. The following section presents the methodological framework of the system developed, and clarifies the relevance of the combined use of cognitive maps with the AHP technique to overcome some of the previously identified limitations.
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