The following model shows a real estate market created by a web-based modelling and simulation tool; Insight Maker. This model shows the relationships and links between many different players within the real estate market and how some changes are able to change the marketplace overall.
Information from Model
The information generated from this model includes "Wanting to Buy", "Houses for Sale" and "Price". "Wanting to Buy" refers to the players who demand or wish to buy houses, "Houses for Sale" refers to the total supply of houses within this marketplace whilst "Price" refers to the price an individual bought a house at a certain point in time.
All variables on the model are shown as ovals and are either fixed or can be adjusted. The fixed variables are shown in yellow, where fixed refers to not being able to be changed by non-editors viewing this model. These variables can not be adjusted as these variables are directly related from the information produced within the model. For example, the variable "Price" can not be adjusted as it would produce incorrect information when the model is simulated
All other variables shown in orange can be adjusted by moving the respective sliders. These variables are able to be adjusted according to what the view wishes.
One adjusted that the user can make is to increase the "Demand Elasticity of Price" from 100 to 200. This increase in demand elasticity means a greater amount of individuals would be willing to purchases a house. As with the laws of supply and demand, an increase in demand will lead to a increase in price. Once simulated, this model shows that over time the price for a house increases.
One other interesting parameter that the user could do is to increase the level of "Destroy Houses" from 0.05 to 0.1. This increase would lead to a fall in the total amount of houses as the level of houses being destroyed (0.1) is greater than the level of houses being build (0.05). As shown in the simulation, this would lead to a fall in the total houses available in the marketplace.