Guidelines for Institutional Changes in the Residential Real Estates Market

The process of institutionalization of the market of residential real estates implies the creation of new economic mechanisms and effective insti­tutional conditions to alleviate the interaction be­tween the different partners in the market. Initially, and in some aspects until now, the Bulgarian mar­ket of residential real estates is characterized by unevenness in the development of its component parts and sporadic investment activity of the main market players. At present, it may rather be said that at the Bulgarian market of residential real es­tates separate economic and legal conditions for its establishment and development are formed, and not for the overall institutional system. From the standpoint of institutional theory these processes have traditionally been viewed as a system of evolving structures that respond to changes in the environment, but the mecha­nisms of the reactions are determined by the internal for the systems processes. Full functioning of the market, according to the conceptual framework of Douglas North, suggesting a dynamic institutional environment which defines the “rules of the game” and insti­tutional agreements - organizations as “partici­pants” in it; the processes of change in formal / informal rules, but also their respective con­trols in compliance with the rules are bound by the imposition of institutional changes. Insti­tutional changes can be created “ bottom-up” in the very businesses and organizations. The attitude of “participants” institutional activity to­wards institutional changes is the focus of this article and the study. The main characteristics are studied- features, factors and conditions of the real estate agencies, i.e. determinants of their institutional activity, which according to the author can act as activating (and in some cases prohibitive) institutional changes in the market of residential real estates. At its core, this trend seems to improve the institutional structure, and hence the institutional condi­tions. And this leads to the prevention of op­portunistic behavior and affects positively the transparency of the market.