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Wharton News Real Estate Professor Chris Mayer on the High Costs of Moving HouseWharton Real Estate Professor Chris Mayer was quoted in The Wall Street Journal last month in an article about the high costs of making life changes. "Many people trade up to a larger home but expenses can easily amount to 9% of the old home's value," figures Professor Mayer. "The biggest hit is the real-estate broker's commission for selling your old home. That commission might amount to 5% of a home's value. But that is only the beginning. You will also probably incur lawyers' fees, home-inspection costs, moving expenses and loan-origination fees for the mortgage on the new house. Those fees include not only mortgage-application costs, but also any points you pay to get a lower interest rate. There's also a risk involved," Mayer says. "Can you afford to own both houses at the same time? You can take out a bridge loan while you sell your old house, but those tend to be very expensive. To avoid that predicament, you could find a buyer for your current home before settling on a new house. But then the clock would be ticking and you run the risk of having to buy a place that you are not completely happy with."
Dr. Marja Hoek-Smit To Unlock Housing Delivery In South AfricaThe International Housing Finance Program of the Zell/Lurie Real Estate Center has been commissioned by the National Housing Finance Corporation of South Africa to assist in the development of solutions to unblock the housing finance delivery system for low and moderate-income households. Dr. Marja Hoek-Smit, the Director of the IHFP, and Dr. Doug Diamond worked with housing finance experts from South Africa to analyze bottlenecks in the current housing finance system. Preliminary recommendations were made on how to organize lender incentives to support the development of products that will best balance risk, consumer acceptance, and affordability and to build a knowledge base that can provide the basis for policy analysis.
Sam Zell addresses Real Estate StudentsThe combined Real Estate Finance classes of Professors Linneman and Mayer enjoyed an hour with real estate executive Sam Zell. Dr. Linneman, in his introduction, drew the parallel between Zell's achievements in the real estate industry and basketball player Michael Jordan. Each had dramatically changed the game in which they were players. Mr. Zell traced the history of the real estate industry from the late '70s, noting its maturation from reliance on dedicated lenders to securitization and the development of REITS. In the future, Zell thought, foreign real estate markets would move ever closer to the US real estate market prototype and by 2005, while there may still be 200 or so REITs, only 20 would be important players.
Professor Rybczynski comments on Chicago's Building BoomWharton Real Estate Professor, Witold Rybczynski, was quoted in a front page story in the New York Times (11/20/00) on Chicago's building boom and historic preservation. Rybczynski, who wrote a book about Chicago's past City Life (Touchstone, 1995) said, "Of all the cities we can think of, except maybe Hong Kong, we associate Chicago with new things, with building new. Combining that with preservation is a difficult task, a tricky thing. It's hard to find the middle ground in Chicago."
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