Knowledge@Wharton -- Real Estate

Housing Has Bounced Back, but Capitol Hill Holds the Key to a Sustained Recovery

Tue, 30 Apr 2013 10:49:37 EST

Housing demand in the U.S. is back, fueled by low interest rates and government subsidies. But a sustained recovery depends on legislative reforms to improve housing supply and encourage builders. Reforms will take time, but meanwhile investors have found new business niches in single-family home rentals and in buying distressed assets worldwide. Eventually, the American dream of home ownership will shore up the industry's fortunes, according to panelists at the Wharton Economic Summit 2013.

Zillow CEO Spencer Rascoff: Pulling Back the Veil on the Housing Market

Wed, 24 Apr 2013 15:21:13 EST

Online real estate marketplace Zillow has brought to home buying and selling what a previous generation of travel websites provided to shoppers wanting to compare the prices of hotels, rental cars and airline flights -- transparency. But finding data that is reliable across the board can be difficult, according to Zillow CEO Spencer Rascoff. And the key is not just simply to offer the information, Rascoff said during a recent conversation with Knowledge@Wharton and Wharton real estate professor Susan Wachter; it's about the level of accuracy gained from the various sub-models the company's software incorporates. (Video with transcript)

Real Estate with a Cause: Identifying Investments that Serve a Triple Bottom Line

Wed, 19 Dec 2012 14:23:46 EST

Real estate is already a complex industry, and it grows even more so when the investment is intended to satisfy the triple bottom line of being profitable, hospitable for those who work or live in the structure, and socially responsible. During a discussion at the recent Wharton Social Impact Conference, panelists from the industry discussed the challenges of crafting initiatives that serve all three masters without cutting corners.

Why the Housing Market Is Poised to Enter a 'Virtuous Cycle'

Wed, 26 Sep 2012 14:34:05 EST

By the less-demanding standards of the past few years, the latest housing figures, like many from recent months, look pretty good. Is this the start of the long-awaited and elusive housing recovery -- one that would bring a stronger economy overall? Or is the market just taunting us as it bumps along the bottom, perhaps only to plunge again? A new paper co-authored by Wharton real estate professor Susan Wachter suggests that, indeed, things are beginning to look up.

Phasing Out Fannie Mae and Freddie Mac: Is It Being Done Responsibly?

Fri, 31 Aug 2012 09:32:44 EST

As the federal government looks to phase out Fannie Mae and Freddie Mac, Denmark could provide a new model for home financing, argues Wharton emeritus finance professor Jack Guttentag in this op-ed.

Optimism Is Up, but the U.S. Housing Market Faces a Painful Shift

Wed, 25 Apr 2012 15:51:05 EST

Spring is typically a peak season for home buying -- a time of year when Americans start thinking about trading up, downsizing or purchasing a vacation home. But four years after the start of the financial crisis, the market is still shaky. Although there have been some signs of life recently, Wharton experts say the crisis changed the game of home-buying for the long term, and possibly forever -- creating significant consequences for the industry and consumers.

Research Roundup: Homeowner Mobility, Divestitures and the Real Impact of FDI

Wed, 07 Dec 2011 15:00:31 EST

How has the housing bust and accompanying recession impacted the mobility of homeowners? Are divestitures always a smart move for companies? Can multinationals create a fact-based case for the real economic impact of their investment in different countries? Professors Joseph Gyourko, Emilie Feldman and Ethan Kapstein, respectively, examined these issues -- and what they mean for business and consumers -- in recent research papers.

Revitalizing the Private Mortgage Market: 'Skin in the Game' and the Consequences for Future Homebuyers

Wed, 11 May 2011 16:38:59 EST

Amid all the uncertainty in the economy, a number of regulators, lawmakers and market experts continue to wonder: What will the mortgage market, so essential to a healthy housing sector, look like in the future? Key to that is a rekindling of the private market for securitizations -- the process of converting mortgages into bonds for sale to investors. Meanwhile, a group of federal agencies recently released a proposed set of requirements likely to toughen standards for both borrowers and lenders. But many experts feel the proposals would not correct the mortgage market's problems.

What the Demise of Fannie Mae and Freddie Mac Means for the Future of Homeownership

Wed, 16 Mar 2011 15:44:15 EST

By most accounts, the federally sponsored mortgage giants Fannie Mae and Freddie Mac did not cause the housing and mortgage crisis. But they were a big part of the problem, prompting a taxpayer bailout costing more than $130 billion. Now the Obama administration wants to phase out the two firms. How would this affect the availability of mortgages, loan rates and home prices? In the end, would such a dramatic change be good for homeowners or bad?

Gazit's Chaim Katzman: 'Our Strategy Is Long-term Ownership'

Wed, 12 Jan 2011 13:16:04 EST

Gazit Globe (usually called Gazit) is among the world's top real estate investment multinationals. Listed on the Tel Aviv stock exchange, the firm operates in some 20 countries and owns or operates 6.3 million square meters of space spread over more than 650 properties. In the U.S., Gazit's investment vehicles include Equity One, a real estate investment trust that focuses on high quality retail properties. Gazit's total asset value exceeds $15 billion. Chaim Katzman, Gazit's chairman and founder, spoke recently with Wharton real estate professor Peter Linneman and Knowledge@Wharton about the company's origins, strategy and his personal management philosophy.

Falling Prices, Foreclosures and Fear: What's Next for the Housing Market?

Wed, 27 Oct 2010 13:14:17 EST

The U.S. housing market has been wobbly for several years, but it has shown some signs of perking up in recent months. The latest reports, however, indicate a setback, with median home prices dropping slightly and sales well below the already depressed levels of 2009. Yet a combination of low mortgage rates and apparent home-price bargains should still be drawing some buyers into the market. Knowledge@Wharton spoke with Wharton real estate professor Susan M. Wachter about the housing market's slow recovery, the prospect of another sharp dip in prices, the effect of foreclosures on the economy, and what it will take to get the market back on track.

The Walls Keep Tumbling Down: Foreclosure Flap and Other Housing Industry Woes

Wed, 13 Oct 2010 14:48:17 EST

After suspending foreclosures in order to review cases that may be flawed by procedural errors or fraud, major mortgage companies have injected new uncertainty into the already weak housing market. But the foreclosure flap is just the most recent of many setbacks for the troubled industry, even as a new generation of potential buyers is rethinking the traditional dream of homeownership. As one Wharton professor notes: "Buying a home doesn't make sense for a large proportion of the population."

Home Is Where the Money Is: A New Incentive Program Aims to Slow Rising Mortgage Defaults

Wed, 29 Sep 2010 15:30:23 EST

As the housing market languishes in the doldrums, an astoundingly high number of homeowners in the U.S. are defaulting on their mortgages. While some simply cannot afford the payments, others own properties that are in "negative equity" -- that is, the value of their homes is less than the amount of the mortgage. As a result, these homeowners have decided to stop paying their mortgages and start fresh. A new incentive program from Wharton finance professor Alex Edmans, however, might give the latter group another choice that could benefit them -- along with lenders and society at large.

Real Estate's Future: 'It Depends on What Degree of Risk You Are Looking For'

Wed, 14 Jul 2010 14:26:05 EST

With the financial crisis wiping out trillions of dollars in property values worldwide, the challenges facing the global real estate industry are greater than they have been in decades. Within the turmoil, however, are opportunities for players in both the commercial and residential real estate markets, a point made by members of a panel at the recent Wharton Global Alumni Forum in Madrid called, "Real Estate: Exploring the Road to Recovery."

Drowning or Hedging? The Risks and Rewards of Owning a Home

Wed, 31 Mar 2010 14:51:19 EST

Nearly 11 million homeowners -- or about one-fifth of those paying mortgages -- are now considered "underwater" because they owe more on their houses than they are worth. But while sharp declines in prices might be enough to make even the most cavalier consumer think twice before buying a home, new Wharton research suggests that homeownership is less risky than might be expected. Indeed, it can effectively hedge against volatile prices for shelter, including rental rates, if a buyer does not take on excessive debt to make the purchase.

Global Real Estate: Ready for a Rebound?

Wed, 20 Jan 2010 16:35:09 EST

The global real estate community is breathing easier than it was a year ago, judging by the sentiments of participants at a recent Knowledge@Wharton global real estate forum titled, "The Road to Recovery: Investing in the Global Real Estate Rebound." Held at the New York Stock Exchange on December 11, in conjunction with Interconnect Events, the forum focused on the developed world's challenges in freeing up private capital and finding opportunities in distressed real estate assets, among other topics. According to some speakers and panelists, opportunities that receded in the West in the wake of the financial crisis can still be found in emerging markets, although the barriers to entry remain high.

Tentatively and Sporadically, Real Estate Investing Makes a Comeback

Tue, 24 Nov 2009 16:13:30 EST

Real estate is showing some early signs of recovery as an attractive investment, at least compared to some other opportunities like corporate debt. But capital markets must open further to revive normal deal flows, said panelists at the recent Zell Lurie Real Estate Center conference. And while glimmers of confidence are returning to some sectors, the positive signs are distributed unevenly. Panelists also discussed lessons learned from regulatory lapses, ways to fix them and growth drivers that might stimulate the economy.

Peter Linneman on Real Estate: The Storm Is Over, the Wreckage Remains

Wed, 19 Aug 2009 21:11:16 EST

Although some upbeat economic news in recent weeks might indicate the beginning of the end of the recession, there's still plenty of "wreckage" to deal with, says Wharton real estate professor Peter D. Linneman. Nowhere is this more apparent than in the housing and commercial property sectors, which have taken one of their worst beatings ever. In an interview with Knowledge@Wharton, Linneman draws on policy missteps of the past to caution the Obama administration to tread carefully and avoid "trying to cure things they can't cure," while contending that the U.S. might have more in common with countries like Venezuela, Russia and Japan than most observers think.

On Shaky Ground: Commercial Real Estate Faces Financial Tremors

Wed, 22 Jul 2009 15:41:58 EST

As the global recession drags on, new concerns are rising about commercial real estate. Loans taken out during the boom years are coming due, but commercial property owners are contending with higher vacancy rates, lower rents and a less-than-receptive environment for refinancing their obligations. Industry analysts and politicians suggest that commercial real estate is about to become the next high-profile casualty in the ongoing economic meltdown. "The shoe has already dropped," says one Wharton real estate professor.

So You Think Owning a Home Will Make You Happy? Don't Be Too Sure

Wed, 10 Jun 2009 17:08:51 EST

Owning a home has long been viewed as the cornerstone of the American Dream, the foundation for a happy family life and long-term financial security. Now, a new research paper challenges that conventional wisdom. Wharton's Grace Wong Bucchianeri, a professor of real estate, says her research shows that while homeowners experience significant joy, they also face more aggravation, spend less time with friends, and are even heavier than renters living in comparable homes.