Synergistic Network Connectivity among Urban Areas Based on Non-Linear Model of Housing Prices Dynamics

Abstract

The assumption of a strong positive relationship between the specificity of an urban area and the operation of the housing market, which responds to megatrends in the market environment, has been the foundation of the research concept adopted for this study. The study treats the housing markets as complex, adaptive dynamic systems which develop through synergistic network responses. This paper employs a nonlinear critically-damped harmonic oscillator model and phase diagrams to describe the dynamics of housing prices (in the years 2006-2016) in order to demonstrate the synergistic network connections in selected Polish cities. In another important part of the study, the authors propose to employ non-classical dynamic measures, i.e. the absolute time of delay, relaxation time and a long-term level of equilibrium. The study has shown that network connections are strongly synchronized during periods of housing market instability (2006)(2007), whereas the process of unsynchronization is observed during a period of stability (2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016). Moreover, phase diagrams have been used to demonstrate the similarity of trends in housing prices as well as the shapes of individual trajectories and the existence of multiple points of quasi-equilibrium.

Housing Price Forecasting in Selected Polish Cities During the COVID-19 Pandemic

“…The level of inertia is months, quarters, or even years, which is different from the reaction time of the financial markets. For more on this subject, see the study of Bełej [19]. Another peculiarity of the housing market is the low volume of transactions.…”

“…Such a rapid increase was unique in the 25-year history of the Polish dwelling market. During this period, a strong synergy of dwelling prices with local housing markets was also noted [19,20]. This period is called unstable growth, which has been shown in Figure 2.…”

“…There is a strong positive feedback between the specific nature of an urban area (which arises from the local features of cities in a geospatial, economic, administrative, and social sense), and the function of the housing market, which at the same time responds to megatrends in the market environment. The housing market is -on the one hand -a factor which stimulates the process of change of the urban space and, on the other, the actions of space users change the conditions of the operation of this market [19,20]. Housing is [21] a special type of commodity because is a spatially immobile, highly durable, costly, multidimensionally heterogeneous, and physically modifiable commodity.…”

The missing asymmetry in the Polish house price cycle: an analysis of the behaviour of house prices in 17 major cities

“…Prices remained stable in the long-term, and rapid and short-term fluctuations were observed in unstable states. Kulesza and Bełej (2015) and Bełej (2018) evaluated the asymmetry of price cycles on the real estate market with the use of a non-linear mathematical function describing the behaviour of a harmonic oscillator. They analysed the phase of rapid price increases, followed by an asymptotic return to long-term stability characterised by series of impulses of decreasing magnitude.…”