This article considers the 2007-8 real estate market as a complex adaptive system. The article begins with a discussion of its perception of a system. Given that definition, system elements are reviewed. Agents include mortgage holders, lending institutions of a variety of forms, insurers, and regulatory agencies. The focus is on the US with some comparison to the UK and Canada. This system was affected by economics with heavy governmental influence. A market that had been highly stable for decades reacted very negatively to the influences of financial engineering seeking to take advantage of expedient opportunities. The complex interactions of financial and governmental actors led to the apparent (and most likely temporary) disappearance of many paper fortunes, as well as leading to the demise of some established banking institutions and foreclosure of many homes in certain areas. Conversely, Canadian real estate markets had less relaxation of regulation, and experienced fewer risky mortgages. The evolution of the real estate system from a systems perspective is described, with analysis of interactions among actors.
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