Wharton News: February 2012
"Is FHA the Next Housing Bailout?"
Gyourko on CNBC's Reality Check
Professor Joe Gyourko has published an American Enterprise Institute working paper, "Is FHA the Next Housing Bailout?" (November 2011) Gyourko argues, FHA could need a bailout of anywhere from $50 billion to $100 billion. Interest in the paper has been extensive. An article in the Wall Street Journal (11/10/11), "Risk Rises for Housing Agency," explained Professor Gyourko's theories. The issue was picked up extensively by publications and news sources including The Atlantic, "FHA Bailout Won't Be Its Death Sentence" (11/11/11); Reason Online; and the International Business Times, "Federal Housing Administration Could Require Bailout, Faces $50 Billion in Losses: Report." Prof. Gyourko spoke about his research on CNBC's "Reality Check" (11/15/11).
More coverage included the Wall Street Journal (11/15/11) "Loan Backer's Cash Runs Low and (11/29/11) and "FHA Audit Sees Possible Bailout Need"; on NPR, "Wharton Professor Cautions FHA May Need A Bailout;" and Mortgage News Daily, "Orange Alert for FHA Program? Who Will Buy HARP 2.0 Loans?" The New York Times reported: "Chances are nearly 50 percent that the Federal Housing Administration will need a bailout next year if the housing market deteriorates further," in the article "F.H.A. Audit Sees Possible Bailout Need" (11/15/11) and quoted Gyourko extensively.
Women Mayors are Eminently Re-electable
"Female mayors don't govern differently, but they're better at being reelected," read the headline in the Washington Post (2/11/12). "Fernando Ferreira and Joseph Gyourko looked at whether female mayors in the United States govern any differently than their male counterparts, examining whether there were substantial differences in policy outcomes, in a December working paper for the National Bureau of Economic Research. The short answer is no." Quoting from the working paper, "We answer this question in the context of U.S. cities, where women's participation in mayoral elections increased from negligible numbers in 1970 to about one-third of the elections in the 2000's.... we find no effect of gender of the mayor on policy outcomes related to the size of local government, the composition of municipal spending and employment, or crime rates." The Post continues, "What's more, the authors continue, having a female mayor doesn't make it any more likely that other female candidates will be elected to office, either for mayor or for Congress. That said, female mayors who manage to get elected are better at holding on to their seats. 'Female victors have superior political skills compared to otherwise equivalent males, as indicated by the fact that they are more likely to win elections once they are able to face the hurdle of winning the first election,' Ferreira and Gyourko write. 'They have a 6-7 percentage point higher incumbent effect than a comparable male.'"
Underwater Homeowners: Anchored in Place or Floating Away?
An article in the Wall Street Journal, "Price Slump Keeps Workers Who Want to Relocate Tethered to Their Homes" (12/28/11) summed up the underwater employment mobility situation: "In theory, as the economy improves, people tend to relocate from places where jobs are scarce to areas where companies are hiring. That would shrink the big pools of unemployed workers in hard-hit areas and help resolve shortages of skilled workers that have held companies back from expanding." However, citing Gyourko's research, the article continued "Borrowers who are underwater are about 30 percent less likely to move than those who rent or have equity in their homes." In "Underwater Homeowners May Swim Freely," (many websites, 1/11/12) Lena Groeger cited research that contends underwater homeowners are more, not less, likely to move, and if they do move, it's close-by so overall employment is not affected. "Joseph Gyourko [according to a paper he co-wrote for the National Bureau of Economics Research (NBER)] points out a more depressing reason that mobility might not affect unemployment. There could be so much unemployment that even if an underwater homeowner couldn't move to take a job elsewhere, an unemployed person near the job would snatch it up. 'That's all you need for this not to have a big labor market effect,' he said in an email."
Gyourko Presents Webinar for Alumni
Prof. Gyourko moderated a new webinar for Wharton Alumni Relations entitled, "The Economy and Real Estate: Evaluating Risks and Opportunities in Uncertain Times," in December 2011. More than 200 Wharton alums signed up for the webinar.
Rybczynski Judges Driehaus Prize
Rybczynski's latest book: The Biography of a Building
Witold Rybczynski was in London recently as a member of the jury of the Driehaus Prize, which for 2012 will be awarded to Michael Graves. Rybczynski moderated a panel at the "Reconsidering Postmodernism" conference in New York, and lectured at City College of New York and at the Athenaeum of Philadelphia about his new book, The Biography of a Building: How Robert Sainsbury and Norman Foster Built a Great Museum. He was recently interviewed by the Philadelphia Inquirer and by Maisonneuve, a Montreal quarterly. He will appear in a PBS documentary on Michael Graves that is slated to air on WTTW Channel 11 in Chicago on March 22, 2012 at 8 p.m. CST.
Wachter in Demand in the Far East and at Home
Professor Susan Wachter was a panelist in the American Finance Association and AREUEA Annual Conference on "Future of Residential Mortgage Securitization" (1/8/12) and held a presentation at Singapore Management University, "Macro-Prudential Policy after the Great Recession" (12/13/11). Among many other engagements, she was the keynote speaker at a conference held at the Korea Development Institute, speaking on "A New Paradigm in Housing Policy after Global Financial Crisis" (12/11) and at a conference sponsored by HUD, where she spoke on "Developing a Long Term Research Agenda for HUD" (11/17/11). Dr. Wachter's work was widely cited, including in a Bloomberg article, "Foreclosure Deal to Spur New Wave of US Home Seizures, Help Heal Market" (2/10/12), in The Fiscal Times in "Paying for the Payroll Tax Cut: Higher Housing Fees?" (12/9/11), in The Guardian, in "Live Discussion: What makes a Sustainable City?" (2/13/12), in the Real-Time Advice section of SmartMoney in "Price Cut Boosting Home Sales" (1/20/12), on MSNBC's "Housing More Affordable than Ever For Foreign Buyers" (1/13/12), in US News & Report in "Home Sales Up, but Financing Issues Block Bigger Growth" (11/21/11). News shows quoting her work or on which she appeared included FoxBusiness's "Will the Markets Face the Same Headwinds in 2012?" (appearance, 12/20/11), PBS Nightly Business Report's "Wharton Real Estate Expert Susan Wachter on MA Lawsuit." (12/1/11), Nightly Business Report (interview, 2/7/12) and Bloomberg's Bottom Line in "Wachter says Housing May Recover Next" (interview, 2/10/12).
Asuka Nakahara was moderator for a panel at ULI Philadelphia region's annual Emerging Trends in Real Estate Conference. The panel focused on real estate prospects for the region and included panelists Todd Frye, Principal, CB Richard Ellis Investors-Strategic Partners, G. Petrucci, President, JG Petrucci Company and Joe Long, Chief Investment Officer, Kimpton Hotel & Restaurant Group. About 500 people attended