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November 2003
Wharton News
Anita Summers—Center Research Director
Wharton Professor Emerita, Anita A. Summers, has been named Research Director for the Zell/Lurie Real Estate Center. She will coordinate a new research project on growth controls and development restrictions and their impacts on housing markets and urban areas. She will also assist with programs for our Research Sponsors.
Why is Manhattan So Expensive?
Joseph Gyourko, Martin Bucksbaum Professor of Real Estate & Finance and Director of the Zell/Lurie Real Estate Center, and Edward Glaeser, Professor of Economics at Harvard University, recently released the first empirical study to quantify the impact that New York's extensive web of regulations has on the price of housing in Manhattan. They were invited to discuss their findings at a Luncheon Forum sponsored by the Manhattan Institute that was held at the Harvard Club in New York City on November 12.
Sinai and Saiz in Washington
Wharton Assistant Professor of Real Estate, Albert Saiz, presented a paper "Human Capital and City Growth" at the Brookings-Wharton Papers on Urban Affairs Conference in Washington DC on October 23rd. In November, Todd Sinai, Abraham Mitchell Term Assistant Professor of Real Estate, was invited to speak at the National Bureau of Economic Research's "Tax Policy and the Economy" Conference, also in Washington. The title of the talk was: "The (Un)Changing Geographical Distribution of Housing Tax Benefits: 1980 to 2000," a joint research project with Professor Joseph Gyourko.
Central Park and the Rebuilding of Lower Manhattan
On the occasion of the 150th anniversary of Central Park, essays by Witold Rybczynski, author of the best-selling book A Clearing in the Distance: Frederick Law Olmsted and America in the 19th Century appeared in the New York Times, Metropolis, and the Smithsonian magazine. Rybczynski, Martin Meyerson Professor of Urbanism and Real Estate, was also invited to speak at the Manhattan Institute in New York City about the historical parallels between the construction of Central Park and the rebuilding of Lower Manhattan. He recently addressed the Capitals Alliance, an annual meeting of world capitals organized by the National Capital Planning Commission in Washington, DC.
International Housing Focusing on the Caribbean and South America
Drs. Marja Hoek-Smit, Director of the International Housing Finance Program at the Zell/Lurie Real Estate Center, presented a training program entitled "Road to Success in Mortgage Financing" for the Caribbean Association of Housing Finance Institutions. The program took place in Jamaica. Later this month, Hoek-Smit will be in Rio de Janeiro to present a training program for the Commissao de Valores Mobilarios, Government of Brazil, on "Brazil's Housing Finance System and the Role of Mortgage Securitization."
Wachter Weighs in on Housing Prices
Susan Wachter, Richard B. Worley Professor of Financial Management and Professor of Real Estate, was quoted in The Philadelphia Inquirer (10/9/03). Wachter noted that, "housing prices have been going up over the last six or seven years, so the expectation is that housing prices will continue to increase. Besides the perception that real estate is a safer investment these days, low interest rates and lower down-payment requirements have fueled demand for luxury properties. New technology, primarily software programs for the mortgage-lending industry, has allowed mortgage underwriters to calculate buyers' fees with greater accuracy. As a result, some buyers have been able to afford higher-priced homes".
Wachter was also cited in the Wall Street Journal on-line edition (10/9/03). The National Association of Realtors said a surge in younger buyers has driven down the median age of a first-time home-buyer to 31 in 2001, from 36 in 1993. "It isn't just historically low mortgage rates pushing the trend," says Susan Wachter. "Hefty down payments aren't as critical to lenders as they once were. Over the last five years there's been a down-payment revolution," she says. The advent of credit-scoring and data-mining techniques has made it much easier for lenders to gauge risk. "The changes have freed lenders from relying on what had been the best predictor of risk, and the biggest hurdle to young buyers—a big down payment."
Linneman Shares Perspectives in Real Estate Education
Wharton Real Estate Professor, Peter Linneman, was a panelist and speaker at the 16th University of Michigan/Urban Land Institute Real Estate Forum held in November at the A. Alfred Taubman College of Architecture & Urban Planning, School of Business Administration. Linneman spoke at a dinner in A. Alfred Taubman's honor about his experience and perspective in real estate education. Later in the month Linneman addressed the Ernst & Young's "State of the Real Estate" Seminar—with a talk entitled, "What's Going On?"
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