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Compensation in Residential Real Estate Purchasers’ Decisions

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  • Źróbek-Różańska Alina

    (Department of Economic and Regional Policy, University of Warmia and Mazury)

Abstract

Predicting demand on the residential real estate market and the behavior of the purchasers requires a wide knowledge of both the economic mechanisms and psychology of decision-making. Decisions on the real estate market are often made by people without professional skills, and using simplified strategies. However, the decision-making process, on top of its heuristic nature, is dynamic and changing. As a result, a discrepancy in the preferred characteristics of planned and actually bought real estate can be observed. Such a discrepancy can be explained with the occurrence of the compensation process. The aim of this article was to recognize and describe the compensation process on the example of the suburban residential real estate market. The aim was achieved by analyzing the preferences of potential buyers in terms of particular characteristics of the location of suburban plots destined for single-family housing (respondents divided into age groups: 25 and 26-40), analyzing the real settlement trend in the suburban zone (the result of actual transactions) and comparing the results, including compensation.

Suggested Citation

  • Źróbek-Różańska Alina, 2016. "Compensation in Residential Real Estate Purchasers’ Decisions," Real Estate Management and Valuation, Sciendo, vol. 24(4), pages 70-78, December.
    • Handle: RePEc:vrs:remava:v:24:y:2016:i:4:p:70-78:n:7
    DOI: 10.1515/remav-2016-0031
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    References listed on IDEAS

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    More about this item

    Keywords

    decision; compensation; real estate market;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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