Segmentation and Analysis of Residential Real Estate

This report emerged from interest in demand and supply interrelations of real estate market. Real estate is a collective field which is combined by demand, supply, and external factors, such as pandemic and government regulations. Although traditional approach to analysis of real estate market characteristics, segmentation, aggregation, and social phenomena has contributed to adequate definition, in this report we attempt to argue that in some cases human behavior is in dispute with conventional assumptions. In the beginning report examines both demand and supply side of the market, which allows to draw parallels to recent supply shock in housing market due to pandemic. Next, this report presents evidence in favor of monopolistic competition as core guide through fundamental analysis of behavior and techniques employed by participants to maximize affluence. The arguments and data presented distinguishes between fundamental real estate theories and conceivable deviation from them in times of uncertainty. In several chapters, the report helps to identify trends in housing market and justify them by conventional theories. Furthermore, throughout the report, we use traditional theories as a basis of our arguments, examine insufficiencies in the market of today, attempt to segmentate essential contributors of demand, and present real estate developer Bonava as an illustration of advance in industry, which has been made due to insufficiencies and changes in intertemporal choice. The report uses approach of microeconomics, although it seeks to investigate real estate market from macroeconomics perspective as well.…