Introduction
Real Estate business is very diverse and there are a large variety of ways to invest in real estate and deal with the business relationships in this area. The simple definition of the business area outlines the relationships between Business-to-business (B2B) and Business-to-Consumer (B2C) market, which involves lease, purchase and other types of deals with land and properties.
Market Specificity
It is important to note that the real estate segment also deals with natural resources, such as water, crops, and minerals. With that in mind, professionals, involved in the activities in real estate segment include, buying, selling, renting property and land, as well as a number of specific expertise groups, dealing with relationships management with public and non-for-profit sectors. One of the most challenging tasks of the research in real estate is dealing with the rapidly changing business, political and economic arena, which demands very flexible and responsive market research and strategies, which enable organizations to understand current needs and desires of the B2B and B2C markets as well as align these current findings with the forecasted demand and trends in the long-term future. This long-term forecasting as a demand for the sustainability of the business is one of the major differentials of real estate segment from other business areas, where the accuracy of such predictions and the timeline can be significantly reduced due to lower investments.
The real estate market highly relies on the internal research capabilities of the organizations, which operate in the area as well as research institutions, focused on providing support to the individuals and organizations to improve and foster prosperity and health of real estate market globally. One of the interesting ways of looking at the potential of research and scale of the studies in the industry is the evaluation of the recent years activity of the Real estate Research Institute (RERI),which provides support with research in the market and funding for independent world´s leading academics and practitioners (RERI, 2016).
Some of the major research areas in the industry include capital expenditure, asset dispositions, diversification of real estate portfolios of major investing companies in the industry, specific trends based on the city, country, regions and continent level, structure depreciation and return on investment,price dynamic and competition profile and sustainability of the businesses and public legislation trends, addressing these issues. The above are just some of the examples of the potential areas of qualitative and quantitative research in the area. RERI provides a number of specific documents and working papers to link the real estate to financial markets, such as asset growth, factor analysis of major liquidity determinants, credit availability and costs and other elements, critical for financial forecasting and, thus, stability in the industry in the United States as well as across the board.
Research Methods Overview
When it comes to the analysis of specific research methods in real estate market, the above-outlined specificity and complex relationships between the industry and public and non-for-profit sector play the significant role in building the profile and the needs of research for short, medium and the long-term goals. As we learned,the types and scale of the research in the industry depend on the organization and institution, which conducts this study and, thus, the purpose and stakeholders, interested in the work. For the purpose of this report, we will look only at the research methods from the organizational perspective in B2B and B2C sectors, which build on research background for market feasibility and the strategy development.
With the above in mind, at research methodology for market feasibility can include active studies and analysis and qualitative and quantitative research. The research in the industry is always twofold. First of all the organizations are looking at the current situation in the market and analyze the feasibility of the projects based on the critical factors Secondly, the company will look at trends and external environment, which helps to build on the medium and the long-term strategy as well as evaluate market feasibility.
First of all, the current situation analysis. One of the critical elements of this study in real estate business is to be able to identify the effective or applicable market area. This element of research allows the organization to segment the real estate market based on geographical, demographic, mobility, social and other criteria in order to create a measurable assessment tool for the field survey. Another essential element of the current situation analysis in real estate is the evaluation of the information sources and revision of different types of properties. The reality shows that organizations cannot understand the dynamics of the industry without being able to identify the horizontal and not only vertical dynamics on the market. That said, for the land evaluation and market feasibility of the land projects, the field survey often has to be conducted for buildings and houses, to determine price differentiation, market preferences, and infrastructure viability. Comparative analysis is this situation is critical for the current situation or field study research.
The dynamics of the industry demand on-going analysis and re-evaluation of data, which has extremely low validity. With that in mind, future trends analysis is essential for research in real estate market. To ensure the quality and validity of such research, companies can apply a variety of qualitative and quantitative research methods. Kakulu (2003) argues that research in real estate covers a broad range of research areas, as the companies aim at building a comprehensive instrument of competitive strategy and investment portfolio. That said, these organizations continuously strive to apply a wide array of research methods in their researches. This multiple research methods use allows building the stronger connection and fit between the actual research problem and the methods used to address it. The specificity of the research in real estate is the range of philosophical and theoretical assumptions, which guide the studies. Crosswell (2003) notes that the paradigm of real estate research is the combination of ontological, epistemological and philosophical assumptions, formed by four major schools: social constructivism, positivism, advocacy, and pragmatism. While all three approaches to research, qualitative, quantitative and mixed are based on the research paradigms of the above schools, a mixed approach is one of the most common to real estate sphere due to the "jack-of-all-trade" nature of real estate professionals (Kakulu, 2003, pp.1-2).
A qualitative research method in real estate research is particularly interesting as it takes into consideration the multiple methods of interaction with participants in the studies. Creswell (2003) divides the strategies, or methods in real estate research in five major areas: phenomenology, biography, grounded theory, ethnography and case study. Taking into account the specific needs of the real estate market, phenomenology and case study are the most effective and recommended for the research in the field. With at in mind, further discussion and comparison of research methods with the rest of academic business research will be done on the basis of the two methodologies: phenomenology and case study.
Research Method Comparision with Academic Research
Creswell's analysis of research methods in qualitative studies is, surely applicable to all areas of research, irrespectively of the industry. Each segment, however, brings up specific and, at times, unique challenges and the real estate is not an exception. That said, this document will look at both methods of research and will further draw on differences between their applications in real estate research as compared to other areas of business.
Phenomenology
First of all, the common definition of phenomenology in academic literature is the study of structures and individual experiences, coming from the first-person exposure to the situation or personal view on the problem. The core purpose of phenomenology is to understand the perspective of those individuals or groups, which are being studied in a given research. With the main goal to gain the multiple views and standpoints of first-person participants, phenomenology aims at building on a structured and universal definition of phenomena in question. The phenomenology allows deeper insight not only into the collective thought through multiple individual experiences, but also to the interpretation of the ways and reasoning for this interpretation of the problem. The main point of this research methodology is to accept the fact that the best way to understand what another person or social thinks is to go through the experience yourself. What is the actual content of the phenomenological research (Richards, 2014)? The method implies interviews and personal data collection, based on several major processes.
One of the critical terms in phenomenology is the epoch, which outlines and prepares the researchers and practitioners to analyze and explain individual learning and interpretation process through the assumption of the pre-existing knowledge and belives. In real estate research, this element is extremely useful in manipulating and directing the individual and group thinking through influencing the past knowledge. The purpose of this element in the real estate research is to set aside all the preconceptions and judgments and build on a new trend.
Another element of phenomenology is the phenomenological reduction, which involves the analysis of the previous interviews and phenomenological research to cluster and enhances the understanding of the individuals in research of equal value. This element is widely used by real estate professionals through evaluation fo funded research and outsourced analysis of the market to such institutions as RERI.
Finally, such elements as imaginative variation and synthesis of meaning allow building on the future development of individual and group thought in real estate studies and create more accurate forecasting of the market trends and changes in evaluation and behavior of the industry players (Keller and Horn, 2003).
The Case Study
Grounded Theory
Grounded theory is one of the general research methods in a qualitative category, applied by different disciplines. The real estate is not an exception, as it aims at building theories, grounded on previous knowledge and can explain the ways the information and concerns are explained and processed in a given environment and situation.The core of the grounded theory is the research question or a set of assumptions to explore, which are further developed and studied through data collection, revision, and analysis. This inductive methodology is essential for real estate due to its structural approach to the generation of theory from systematic research.Levy (2006) argues that the recent developments in real estate market highlighted the gap between the positivist research and the actual need of the studies, where to understand and build on the various modes of human behavior in property market, the researchers should use a methodology, which not only produces empirical descriptions, but also interprets and generalizes them (Levy, 2006, p.369).
Comparison of the Real Estate and Other Business Research
The study of the research methodologies and the specificities of the real estate market allowed to some extend outline the core differential of research in this field from other disciplines. One of the major characteristics of the real estate market is its extreme dynamism and high level of segmentation of the consumers and organizational profiles based on the geographical, demographic, mobility, social and other criteria, discussed previously in this document. Levy’s study (2006) outlines a number of challenges, which academics and practitioners in the field faced in the contemporary market and environment, looking at the property market. The changes in the social background, human behavior and the increasing diversification of individuals and social groups resulted in higher demand from the organizations to not only identify the behaviors but interpret them in a way that allows building medium and the long-term strategies. The timeline of this forecasting is in the vast majority of situations longer than in other industries, due to the time and effort invested in real estate projects.
When it comes to the phenomenology and case study method, the jack-of-all nature of the real estate practitioners and researchers outlines the core differences with other academic research. As it was previously mentioned, the real estate market is one of the industries with strong links with public and non-for-profit sector, which demands more multifaceted approach to the choice of phenomena and situational analysis to ensure that the variety of case study methods and phenomenological research cover the range of issues, behaviors and situations, adequate to analyse and generalize the human behavior.
Grounded theory in real estate sets the same challenges as in other disciplines, majorly related to the credibility, validity, and conformability of the qualitative research. The point that should be made here is the complex nature of the market in terms of reliability of collected data, as there is little focus groups, which allow natural setting of phenomena. With that in mind, real estate, more than another academic business research utilizes field research, purposive and theoretical sampling and comparison of the results across different focus groups and settings. One of the interesting approaches is the negative case analysis, which constitutes an important part of a qualitative study in real estate and is not so common for other fields.
The above allows concluding that the real estate research have transitioned from data analysis and collection for the current event to data interpretation and generalization to serve the purpose of more strategic and long-term oriented approach to the studies in the business areas. While the methods of research, such as phenomenology, case study, and the grounded theory continue outlining the core methodology in the academic business research as a whole, there are certain elements to these approaches, which are either more common or unique to the real estate industry. The reality is that the complexity of the market calls for multiple research methods and mixed approach will continue dominating the academic field in this segment.
References
Keller, M. & Horn P., 2003. Strategic Management. 2nd Edition. Journal of Literature, 12(5), pp.66-89.
Miller T., Birch M., Mauthner M. & Jessop J. 2012. Ethics in Qualitative Research. 2nd Edition. Los Angeles: Sage Publications.
Richards L. 2014. Handling a Qualitative Research Data: A Practical Guide.3rd Edition. New York: Sage Publications.
RERI. 2016. About Us. Real Estate Research Institute Official Website. Web 1 Jan 2016, http://www.reri.org/ [Accessed 20 June 2016].
Kakulu I.I. 2003. Qualitative Research Strategies and Data Analysis Methods in Real Estate Research - An innovative approach using the BB Model. Working Paper. Department of Estate Management, Rivers State University of Science and Technology, Port Harcourt. Web 1 Feb 2003, file:///C:/Users/Usuario/Downloads/Qualitative%20Research%20Strategies%20and%20Data%20Analysis.pdf [Accessed 20 June 2016].
Creswell, J. W. 2003. Research Design Qualitative, Quantitative and Mixed Methods Approaches. Sao Francisco, Sage Publications.
Levy D. 2006. Qualitative Methodology and Grounded Theory in Property Research. Pacific Rim PropertyResearch Journal. 12 (4). 369-388.
