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The Dynamics of the Real Estate Market: The Impact of Price Changes on Consumer Decisions to Purchase Housing

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  • Montvydaitė Deimena

    (Dr. State Higher Education Institution, Laisvės sq. 23, Panevėžys, Lithuania)

Abstract

The real estate market has recently undergone significant changes that influence consumer behavior. The aim of the study is to assess the dynamics of the real estate market and to investigate how changes in housing prices affect consumers’ intentions to purchase real estate in the near future, investigating the case of Lithuania. The research methods of scientific literature analysis, statistical data analysis, regression analysis, and logical conclusion formulation are employed. The study’s results revealed trends in the growth of real estate market prices in Lithuania. A positive relationship was established between the increase in housing prices and Lithuanian consumers’ intentions to buy or build a home within the next 12 months. Although it may seem that rising housing prices could negatively impact intentions to purchase, the study’s findings suggest that the factor of increasing prices may encourage purchasing decisions, as consumers, seeing upward price trends, do not want to miss the opportunity to buy before prices rise further. They may view prices as an investment opportunity or trust the improving economic situation.

Suggested Citation

  • Montvydaitė Deimena, 2024. "The Dynamics of the Real Estate Market: The Impact of Price Changes on Consumer Decisions to Purchase Housing," Management Theory and Studies for Rural Business and Infrastructure Development, Sciendo, vol. 46(4), pages 551-560.
    • Handle: RePEc:vrs:mtrbid:v:46:y:2024:i:4:p:551-560:n:1009
    DOI: 10.15544/mts.2024.50
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    References listed on IDEAS

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    1. Julia Braun & Hans-Peter Burghof & Julius Langer & Dag Einar Sommervoll, 2024. "The Volatility of Housing Prices: Do Different Types of Financial Intermediaries Affect Housing Market Cycles Differently?," The Journal of Real Estate Finance and Economics, Springer, vol. 69(3), pages 377-408, October.
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      More about this item

      Keywords

      consumer behavior; purchase intentions; real estate market; housing prices.;
      All these keywords.

      JEL classification:

      • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
      • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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