Housing | Insight Maker

Miguel's Model of the Real Estate Market and Price Elasticity

This model represents the real-estate market, and the processes and variables in play which influence thatfocus on the effects of Price on the Elasticity of Supply and Demand.

The law of supply and demand states that when there is a high demand for a good or service. The price of the good or service rises. If there is a large supply of good or service but not enough demand for the good or service, the price falls.

The price elasticity of supply is used to see how sensitive the supply of a good is to a price change. The higher the price elasticity the higher the sensitivity to price change. A Low price elasticity implies that changes in price have little influence on supply.

The price elasticity of Demand is used to see how sensitive the demand for a good is to a price change. The higher the price elasticity, the more sensitive to price changes. A Low price elasticity implies that changes in price have little influence on demand.

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Important Variables and Stocks Involved

Old Quantity of Supply

%Change in Quantity Supply

HousesforSale

Old Quantity of Demand

%Change in Quantity Demand

WantingToBuy

Price Elasticity of Supply

Price Elasticity of Demand

%Change in Price

Old Price

New Price

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Within this model to calculate the price elasticity of supply, the percentage change is first calculated using the Old quantity and New quantity (HousesForSale).

This percentage change is then divided by the percentage change of the Old Price and New Price to obtain the Price Elasticity of Supply.

Similarly to calculate the price elasticity of demand, the percentage change is calculated using the Old quantity of demand and New quantity of demand (WantingToBuy).

This percentage change is then divided by the percentage change in price to obtain the Price Elasticity of Demand.

With the slider variables that can be changed are the Old Price and New price which affect the percentage change in price.

The percentage change in price then affects the Price Elasticity of Supply and Demand as it is used in conjunction with the %Change in quantity of Supply and Demand to obtain a value.

If we set the settings and simulate to:

Old Price = 500('000)

New Price = 250('000)

Old Quantity of Supply = 100

HousesforSale (New Quantity of Supply) = 50

Old Quantity of Demand = 10

WantingToBuy (New Quantity of Demand) = 5

We can see that the Demand is a lot higher because the the houses are half the price than the old price.

If we use these settings:

Old Price = 250('000)

New Price = 500('000)

Old Quantity of Supply = 50

HousesforSale (New Quantity of Supply) = 25

Old Quantity of Demand = 25

WantingToBuy (New Quantity of Demand) = 10

We can see that the supply is a lot higher than demand as the new price is twice the amount of the old price.

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With the sliders, these values can be adjusted to see the affect on the Price Elasticity of Supply and Demand.

This Model should have included its effect on the price however, was not added due to problems finding the right equation.

Miguel Macaraeg 43267971

Miguel Macaraeg

Hume Winzar's only-slightly-stolen Real Estate Model

Price is a linear function (straight line) of the proportion of hourse for sale (positive slope), and also a linear function of the proportion of buyers (negative slope).

Coefficients for the Supply Elasticity of Price and the Demand Elasticity of Price can be adjusted by the user using sliders.

Sales in each month are simply the lesser of the number of houses for sale and the number of buyers.

The number of houses for sale is a linear function of Price (positive slope) in a linear function of Price (positive slope) in the Flow "ToMarket" Coefficient for Price Elasticity of Supply can be adjusted using a slider.

Clone of Something Ghina did

Maylis P

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Martin Prause

Simple SD version of Wheaton 1999 stock flow representation of DiPasquale-Wheaton 4 Quadrant steady state model (4QM) from Eskanasi 2014 and Zhang 2018 theses

Housing dynamics 1

Geoff McDonnell

5

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Priscilla Lin

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Tanwa Arpornthip

A stock-flow model of a Real Estate market.

A simple three-year, monthly, systems model.

Price is a linear function (straight line) of the proportion of houses for sale (positive slope), and also a linear function of the proportion of buyers (negative slope).

Coefficients for the Supply Elasticity of Price and the Demand Elasticity of Price can be adjusted by the user using sliders.

Sales in each month are simply the lesser of the number of houses for sale and the number of buyers.

The number of houses for sale is a linear function of Price (positive slope) in the Flow "ToMarket".

Coefficient for Price Elasticity of Supply can be adjusted using a slider.

The number of buyers is a linear function of Price (negative slope) in the Flow "Motivation". Coefficient for Price Elasticity of Demand can be adjusted using a slider.

Clone of Simple Real Estate Market

PT

A stock-flow model of a Real Estate market.

A simple three-year, monthly, systems model.

Price is a linear function (straight line) of the proportion of houses for sale (positive slope), and also a linear function of the proportion of buyers (negative slope).

Coefficients for the Supply Elasticity of Price and the Demand Elasticity of Price can be adjusted by the user using sliders.

Sales in each month are simply the lesser of the number of houses for sale and the number of buyers.

The number of houses for sale is a linear function of Price (positive slope) in the Flow "ToMarket".

Coefficient for Price Elasticity of Supply can be adjusted using a slider.

The number of buyers is a linear function of Price (negative slope) in the Flow "Motivation". Coefficient for Price Elasticity of Demand can be adjusted using a slider.

Clone of Simple Real Estate Market

Arnaud FAUSSE

Assignment 3: Complex Systems

Ricky Su 43671942

Retail Re-state Market

Insight Maker is a program that allows users to create complex interactions among industry or social factors. This program was used to model the relationships among different players in the real estate market.

This model shows the effects of changes in supply and demand, demand price and supply cost, availability of houses and houses prices on the Retail Re-state Market. Each simulation can be focused on how either Demand, Supply, supply cost, demand price, interest rate and availability of houses interacts with one another over time.

Demand, Demand Price, Supply, Supply Cost, Interest Rate, House Market and Houses Prices can be all adjusted by the user using the sliders [Slider Value 0-100 (000 000 value)] except for interest rate where it limited to 0-0.10. Allowing the user to simulate different scenarios and view changes in the market.

For Example: A slight change in House Prices will affect the Availability of Houses, House Price and the Supply and Demand dramatically.

When Supply increases, the availability of houses increases while Demand decreases.

Fixed variables/relationships:

Buyer Growth Rate, the Demand Price, Price Demand, Price Decrease, Supply Rate, Supply Price, Price Supply, Price Decrease.

These variables/relationships are shown on yellow. Fixed refers to no adjustments or changes is allow to those specific variables/relationships by the non -editor viewer. These variables cannot be change or adjusted as these variables/relationships are directly related to the information produced. With any changes to the fixed variables/relationships, it can cause incorrect simulation of the model to viewers.

Supply/Supply Cost has a direct relationship to one another as one variable increases the other one decreases. Demand and Demand Price has an inversely relationship related to Price.

House Price is the main reason why someone would sell or buy a house. Price is made up of various different factors. Demand price, demand, supply cost and supply are the main reasons houses price fluctuates.

Availability of Houses is simply New houses and houses Sold, based on If statements, If Demand=>Supply or If Supply <= Demand, the quantity will adjusted to meet the Demand and Supply levels.

Houses Price is simply House Price Increase and Houses Price decrease, based on if statements, If Demand=>Supply Cost or If Supply Cost <= Demand Price, the price will be adjusted to meet the Demand and Supply price.

Interesting Parameter:

This point is interesting because it shows greatest fluctuations. You will see in Price Impact on Demand/Supply display when house prices increases, supply will increase while demand will decrease, as people are less willing to purchase a house at that price due to high cost vice versa. Market availability and prices, as availability of houses increases there is a decrease in houses prices causing excess of supply, leading to an increase in demand as people are more willing to purchase properties when prices are lower vice versa. Construction shows availability of new houses, over time houses are sold, when sold houses hits zero, new houses will increase as there will be a deficient of supply vice versa.

Setting Demand at 100

Setting Demand Price at 100

Supply at 50

Supply Cost 60

Availability of Houses 100

House Prices 85

Interest Rate 0.05

Notes:

There is a slight delay when a change variable is changed in this model. This represents the real market as a change in price, demand or supply doesn’t translate to an immediate action on the market as shown by this model.

Clone of Ricky Su 43671942 (Assessment 3)

Chris Dinan

A stock-flow model of a Real Estate market.

A simple three-year, monthly, systems model.

Price is a linear function (straight line) of the proportion of houses for sale (positive slope), and also a linear function of the proportion of buyers (negative slope).

Coefficients for the Supply Elasticity of Price and the Demand Elasticity of Price can be adjusted by the user using sliders.

Sales in each month are simply the lesser of the number of houses for sale and the number of buyers.

The number of houses for sale is a linear function of Price (positive slope) in the Flow "ToMarket".

Coefficient for Price Elasticity of Supply can be adjusted using a slider.

The number of buyers is a linear function of Price (negative slope) in the Flow "Motivation". Coefficient for Price Elasticity of Demand can be adjusted using a slider.

Clone of Simple Real Estate Market

Steven D'Alessandro

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Simon Thompson

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Ni Nyoman Wulandari

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

collin Kostage

Fig 17.15 p700 Causal structure of commercial real estate markets of Case Study from John Sterman's 2000 Business Dynamics Book

Clone of Boom and bust in Commercial Real Estate

Chris Dinan

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Chris Dinan

Houdini SD Model from Eskanasi 2014 thesis including land and social housing

Housing system dynamics 6 Netherlands

Geoff McDonnell

3

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Jimmy Neutron

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Kyra Evers

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Jimmy Neutron

Fig 17.15 p700 Causal structure of commercial real estate markets of Case Study from John Sterman's 2000 Business Dynamics Book

Clone of Boom and bust in Commercial Real Estate

Tanya Marcella

Fig 23 Houdini Interaction between rental and owner occupied sectors SD Model from Eskanasi 2014 thesis

Housing system dynamics 4 Netherlands

Geoff McDonnell

Fig 17.15 p700 Causal structure of commercial real estate markets of Case Study from John Sterman's 2000 Business Dynamics Book

Clone of Boom and bust in Commercial Real Estate

Pavel Riveros Villazana

10 months ago

The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.

Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.

Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.

The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.

Clone of The effect of Supply and Demand on the Housing Market Assignment 3 (43323871)

Nicholas Sejnost

8 months ago

Sketch of STR(short-term touristique rentals) in a state of constant total housing supply. Based on Lyon case. Not to be taken seriously.

STR

Konstantin Plotkin

4 days ago

Housing Models