Evaluation of factors leading to formation of price-bubbles in the real estate market of Lithuania

Recently, real estate market has been discussed more frequently in the framework of economic analysis. The global economic crisis of 2008 has demonstrated the severity of financial shock that can be caused by inconsiderate investments in the real estate market. The present article analyses business cycles and the phenomenon of a price-bubble in that context. Drawing on the analysis of reference literature we identify the main reasons that can lead to fluctuations of prices in the real estate market. Finally, drawing on correlation and regression analysis we determine which factors have the strongest influence on the Lithuanian real estate market.

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Price Bubble In The Real Estate Market - Behavioral Aspects

Real Estate Management and Valuation ◽

10.2478/remav-2014-0010 ◽

2014 ◽

Vol 22 (1) ◽

pp. 77-90 ◽

Cited By ~ 4

Author(s):

Justyna Brzezicka ◽

Radosław Wisniewski

Keyword(s):

Real Estate ◽

Real Estate Market ◽

Herd Behavior ◽

Negative Consequences ◽

The Real ◽

The Real Estate ◽

Price Bubbles ◽

Price Bubble ◽

The Real Estate Market ◽

Behavioral Aspects

Abstract The article pertains to the topic of speculative price bubbles which arise in the real estate market. The individual parts of the article deal with the connection between the price bubble in the American real estate market and the global economic crisis, defining the concept of a price bubble with regard to the behaviors of market participants, providing a description of the environment generating price bubbles, and systematizing the reasons behind the formation of price bubbles. The analysis of behavioral aspects accompanying the existence of a price bubble is a key issue. The assumed considerations indicate that the housing price bubble could not exist in the real estate market (REM) if its formation was not accompanied by behavioral aspects. These aspects include, among others, giving in to temptations and emotions, limited rationalism, herd behavior, and seeking to make profits in a short amount of time at the expense of long-term negative consequences. The nature of these deliberations is theoretical.

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Price Bubbles in the Real Estate Markets - Analysis and Prediction

WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS ◽

10.37394/23207.2022.19.27 ◽

2022 ◽

Vol 19 ◽

pp. 292-303

Author(s):

Paweł Dec ◽

Gabriel Główka ◽

Piotr Masiukiewicz

Keyword(s):

Real Estate ◽

Predictive Analytics ◽

Real Estate Market ◽

Point Of View ◽

Subprime Crisis ◽

The Real ◽

The Real Estate ◽

Price Bubbles ◽

The Real Estate Market ◽

The Government

The article concerns the issue of price bubbles on the markets, with particular emphasis on the specificity of the real estate market. Up till now, more than a decade after the subprime crisis, there is no accurate enough method to predict price movements, their culmination and, eventually, the burst of price and speculative bubbles on the markets. Hence, the main goal of the article is to present the possibility of early detection of price bubbles and their consequences from the point of view of the surveyed managers. The following research hypothesis was verified: price bubbles on the real estate market cannot be excluded, therefore constant monitoring and predictive analytics of this market are needed. In addition to standard research methods (desk research or statistical analysis), the authors conducted their own survey on a group of randomly selected managers from Portugal and Poland in the context of their attitude to crises and price bubbles. The obtained results allowed us to conclude that managers in both analysed countries are different relating the effects of price bubbles to the activities of their own companies but are similar (about 40% of respondents) expecting quick detection and deactivation of emerging bubbles by the government or by central bank. Nearly 40% of Polish and Portuguese managers claimed that the consequences of crises must include an increased responsibility of managers for their decisions, especially those leading to failures.

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The price bubble morphology

Folia Oeconomica Stetinensia ◽

10.2478/foli-2013-0009 ◽

2013 ◽

Vol 13 (1) ◽

pp. 76-94 ◽

Cited By ~ 2

Author(s):

Waldemar Tyc

Keyword(s):

Real Estate ◽

Housing Market ◽

Economic System ◽

Institutional Environment ◽

Real Estate Market ◽

Economic Systems ◽

The Real Estate ◽

Price Bubbles ◽

Price Bubble ◽

The Real Estate Market

Abstract The article presents a discourse on the mechanism by which price bubbles emerge and burst. For idealization purposes the author assumes that even though price bubbles emerge in various markets, their morphology differs from market to market, be it the hi-tech stock (or, more generally, the stock market), the real estate market (where land is of fixed supply) or the housing market. The sources of their diversification lie in the type and weight of the causes of their appearance, the differences between their causative and functional determinants and the market feedbacks. Any interpretation of the nomological diversification of price bubbles (in the sense of their categorisation) requires looking at the system pragmatics and the market in which they emerge. Thus the designations of economic systems and the specifics of markets constitute both the economic and the institutional environment of their origin. They also constitute the necessary context for their understanding and interpretation, as price bubbles rise and collapse within specific functional structures of an economic system.

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The Cartographic Method of Research in Exploring the Real Estate Market - A Case of Using Maps for the Introductory Analyses of the Lublin Suburban Commune of Konopnica

Real Estate Management and Valuation ◽

10.1515/remav-2015-0012 ◽

2015 ◽

Vol 23 (2) ◽

pp. 17-26

Author(s):

Kamil Nieścioruk

Keyword(s):

Data Mining ◽

Regression Analysis ◽

Real Estate ◽

Real Estate Market ◽

Capital City ◽

Mean Values ◽

The Real ◽

The Real Estate ◽

Spatial Factor ◽

The Real Estate Market

Abstract The paper deals with the introductory analysis of the real estate market of a suburban commune located near a big (voivodeship capital) city. The analysis is based mainly of the cartographic method of research. Besides data mining and preparation, maps play an important role here, presenting values acquired directly from the register of notarial deeds of estate sales and purchases, as well as values resulting from statistic computation, for example mean values of area or price, absolute numbers of transactions or real estate type. The spatial factor is also taken into consideration when it comes to more complex or specific analyses. The influence of distance understood as a metric and time factor, as well as regression analysis results are also visualized on maps. Such presentation is a good step towards advanced analyses providing maps are prepared according to the rules of cartography. The paper stresses that a map can be a great tool in aiding every stage of research, but may also cause misinterpretations and false conclusions when at least basic rules are not complied with.

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Speculative Bubbles and their Components on the Real Estate Market–A Preliminary Analysis

Real Estate Management and Valuation ◽

10.1515/remav-2016-0008 ◽

2016 ◽

Vol 24 (1) ◽

pp. 87-99 ◽

Cited By ~ 3

Author(s):

Justyna Brzezicka

Keyword(s):

Real Estate ◽

Real Estate Market ◽

Market Prices ◽

Speculative Bubble ◽

The Real ◽

The Real Estate ◽

Speculative Bubbles ◽

Price Bubbles ◽

The Real Estate Market ◽

Over Time

Abstract Various speculative phenomena arise on the real estate market, and the speculative bubble (SB) is one of the best known events of the type. Speculative bubbles still have many unidentified components, and are characterized by high research potential due to the multiple factors responsible for bubble creation, as well as considerable practical implications on account of the multivariate results describing the real estate market (REM) and its surroundings. Speculative price bubbles are associated mainly with changes in price trends on the real estate market. A thorough analysis of a speculative bubble over time demonstrates trend changes also in other research categories which constitute bubble components and elements of the real estate market and its surroundings. The above criteria were used to identify a new research category termed speculative bubble components (SBC). The research hypothesis states that speculative bubbles should be analyzed based not only on prices, but also on bubble components. The objectives of this study were to: 1) classify speculative phenomena on the REM, 2) describe a speculative bubble based on market prices and SBC, and 3) present the results of a study evaluating speculative bubble components in relation to market prices, and discuss the trajectories of the analyzed research categories over time. This study attempts to determine whether a speculative bubble can be analyzed in view of its components, and which elements of the real estate market and its surroundings can be classified as SBC. Attempts were also made to identify a research method that supports the identification of SBC variables and classification of variables into groups, and explains market prices in view of the identified variables and groups. The research relies on a review of literature in the theoretical part and statistical analyses in the experimental part. The results will broaden our knowledge of the mechanisms behind speculative phenomena on the real estate market.

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