The purpose of this study is to develop an understanding of the dynamics of the real estate market in Istanbul. As a result of the unavoidable delays in perception of the real estate condition and construction of new buildings, the market variables are strongly oscillatory. A system dynamics model is constructed to understand the reasons of oscillations in real estate prices in Istanbul from the perspective of a construction company. The model includes the factors effecting the speed and size of the construction side (supply) and sales (demand). The model focuses on the balance/imbalance between housing supply and demand as a result of fundamental material and information delays, rather than costs and interest rates. Different scenarios are tested to improve the current oscillatory behavior. This model can serve as a simulation basis for predicting the reaction of the market to changes in the decisions of internal players and external inputs.