| Summary: | This thesis rigorously investigates the dynamics of real estate markets, focusing on two distinct geographic areas: Iceland and the Bay Area, California. It delves into the critical differences in housing market dynamics and real estate purchasing processes between these regions and assesses which area provides a more conducive environment for real estate acquisition. This study employs a comprehensive comparative analysis to delve into how geographical, economic, and policy-driven nuances shape housing affordability and market stability, ensuring the validity and reliability of its findings. The initial sections of the analysis thoroughly examine the economic theories of real estate economics, looking into the mechanisms of supply and demand, the impact of monetary policies, and the resulting price formations in these diverse environments. The study contrasts the different impacts of economic stability, government intervention, and market forces on real estate dynamics by juxtaposing Iceland's smaller, policy-driven market with the Bay Area's globally influenced, tech-driven economy, leaving no aspect unexplored. Moreover, this thesis meticulously examines specific aspects such as government policies towards housing, the role of financial institutions in shaping the markets, and the socio-economic factors influencing buyer behaviors. Through this comprehensive study, the thesis aims to offer deep insights into the broader implications of housing market regulations, economic conditions, and purchasing trends. These insights are not just theoretical but also provide practical guidance for policymakers, investors, and the public in both regions, making this research highly relevant and impactful.
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