The Impact of Market Activity on Property Valuations in Digital Real Estate Through a Quantitative Analysis of Bidding and Sales Dynamics

This study investigates the impact of market activities, specifically the number of bids and sales, on property prices in digital real estate markets. With the rise of virtual environments and digital assets, understanding the factors that drive property valuations in these markets has become increasingly important. Utilizing a dataset of 2,000 property transactions, this research employs correlation and regression analyses to explore how competitive bidding and sales frequency influence prices. The results indicate a significant positive correlation (r=0.38r = 0.38r=0.38) between the number of bids a property receives and its final sales price, suggesting that properties attracting more bids are perceived as more valuable, leading to higher prices. The regression analysis further supports this, showing that each additional bid is associated with an increase of 6.63×10216.63 \times 10^{21}6.63×1021 in the sales price (p<0.001p < 0.001p<0.001). Conversely, the study finds a negative relationship between the frequency of sales and property prices, with a correlation of r=0.02r = 0.02r=0.02 and a regression coefficient of −4.85×1021-4.85 \times 10^{21}−4.85×1021 (p<0.001p < 0.001p<0.001), indicating that properties traded more frequently tend to decrease in value, possibly due to market saturation or perceptions of diminished uniqueness. The trend analysis reveals considerable volatility in market activities and property prices over time, reflecting the dynamic and evolving nature of digital real estate markets. These findings have important implications for investors, platform operators, and researchers. Investors should monitor bidding activity as an indicator of property value while being cautious of properties with high turnover rates. Platform operators are encouraged to manage market dynamics carefully to maintain a stable investment environment. This study underscores the importance of market activity in determining digital property prices and highlights the need for continued research into the unique factors influencing valuations in virtual environments.