Price Bubble In The Real Estate Market - Behavioral Aspects

Brzezicka Justyna () and Radosław Wiśniewski
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Brzezicka Justyna: Faculty of Geodesy and Land Management University of Warmia and Mazury in Olsztyn

Real Estate Management and Valuation, 2014, vol. 22, issue 1, 77-90

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.

Keywords: real estate market; price bubble; behavioral economics; behavioral aspects of the real estate market (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:22:y:2014:i:1:p:14:n:10

DOI: 10.2478/remav-2014-0010

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