REAL ESTATE MARKET SYSTEM - PHASE SPACE THEORY APPROACH

Abstract

Abstract The real estate market poses a topic of research in the theoretical sense, as well as encouraging researchers to search for new methods/tools/platforms which would help to understand, manage and undertake all kinds of activities (decisions) within its realm. The process of globalization, need to constantly gather information (create extensive registers), data management, implementation of complicated computing procedures (which only seemingly provide solutions), and awareness and knowledge of market participants are supposed to lead us to "ultimately understand" the structures of the real estate market. However, in most cases, the decisions made in the real estate market realm are not rational. Market participants do not always act accordingly to the (economic) presumptions of the market and many of their behaviors can easily be viewed as chaotic and impulsive. Owing to this fact, it seems justified to invoke mathematical and physical concepts, and apply them to the real estate market. This article describes the concept of how the real estate market is perceived according to the phase space theory. Phase space is understood as a multidimensional space of market events where the transfer of rights to real estate takes place and decision-making processes occur. Transaction prices, on the other hand, indicate market development and are an emanation of decision-making processes. The goal of this article is to provide proof for the hypothesis that the real estate market is a system existing in multidimensional phase space and that the complexity of this space affects the unit price of real estate.