Dynamic Pricing for Real Estate

TL;DR

This paper develops an advanced mathematical model for optimizing real estate prices, incorporating demand variability, time value of money, and property development stages to improve pricing strategies.

Contribution

It enhances previous models by integrating demand fluctuations, financial factors, and development progress, offering a more comprehensive approach to real estate pricing optimization.

Findings

Model accounts for demand variability and growth stages.

Provides a framework for dynamic real estate pricing.

Improves revenue outcomes through strategic adjustments.

Abstract

We study a mathematical model for the optimization of the price of real estate (RE). This model can be characterised by a limited amount of goods, fixed sales horizon and presence of intermediate sales and revenue goals. We develop it as an enhancement and upgrade of the model presented by Besbes and Maglaras now also taking into account variable demand, time value of money, and growth of the objective value of Real Estate with the development stage.