The dynamics of the development of the real estate market is found unprecedentedly unstable within the last decade considering changes of real estate prices. The essential problem concerns the need for establishing the limits, and re-defining the meaning of stable and unstable periods of the real estate market development, paying special attention to discontinuous changes. The research aims at explaining the sources of abrupt real estate
price changes using scientific methods which are new in this subject. The research would make it possible to model the hardly explored field of sudden changes in the real estate market in order to reveal the edge of discontinuity.
In general, the main goal is to verify the statement that the observed fluctuations in property prices are insignificant adjustments to the trend. The scientific hypothesis is that the periods of sudden price changes reflect an crucial feature of the real estate market, and they constitute the turning points of its development. The evolution path of the real estate market under the influence of the control parameters runs mostly over the areas of long-term stability, and occasionally enters into the instability area.
According to authors, the proper way to model abrupt price changes in the real estate markets influenced by external circumstances (control variables) is to make use of the theory of discontinuous change, also known as the theory of morphogenesis, or the catastrophe theory. The catastrophe theory provides a qualitative mathematical framework for reasoning about how control parameters affect the system behavior.

1. PRESENTATION: Real estate market under catastrophic change., Microsoft Office Document, 1.2MB

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