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Wharton News Research Sponsors at Merion Golf Club From left: Research Sponsors Chris Mundy, Rob Bellinger, and Dave Congdon at Merion Golf Club.  Research Sponsors stroll to the green at the Merion Golf Club Nov. 1, a glorious autumn day. Asuka Nakahara moderated a panel on Capital Markets at the Annual Commercial Real Estate Show, "Building Bridges, Making Connections," presented by the Tristate Realtors Commercial Alliance, in King of Prussia, Pa. on October 26. Sinai Sought for Trend SpottingTodd Sinai, associate professor of real estate, was quoted in a New York Times article (8/25), "Home for Sale, by Anxious Owner," which explained how it can be that home sales are falling rapidly, the number of houses on the market is surging, yet the national median home price has continued to rise. "We don't have any house price indexes that get it right," Sinai told the reporters. "Sellers are pretty picky. They are not willing to lower prices enough in downturns; they don't do it very quickly." Their reluctance delays sales, contributes to rising inventories and allows prices on the remaining transactions to show an annual increase.The Fall Wharton Alumni Magazine published a feature article on Sinai, "Forecasting Changes on the Housing Front . . . Unconventional Wisdom on Cooling Home Prices." Sinai's opinion is that the housing market has returned to normal after a period of "red hot" activity. Housing prices will probably decline, "especially in the hottest markets," but this is in reality simply a leveling off. CNN Money/Business 2.0 (10/25) quoted Sinai in "Five bubble-proof markets." "San Francisco, New York, and a small handful of other big cities may suffer dramatic swings in a downturn, but their long-term trends 'are so strongly upward that if you're willing to buy and hold, it's a good strategy,'. . . The same logic, Sinai says, applies in other inflated markets like Boston, Los Angeles, and Seattle." NAREIT's Real Estate Portfolio (11/06) was devoted to "The Road to Retirement." In the article, Sinai was asked, "What role should real estate equity and REITs play in retirement saving and investing?" He answered, "It depends on the wealth of the client. For the typical family, investing a portion of their net worth in securitized real estate is a no-brainer. Direct ownership of real estate takes a lot of time, effort and hard work to generate a decent return. . . Plus, direct ownership of real estate, at the individual level, has tremendous amounts of idiosyncratic risk. Unless an individual truly enjoys owning and operating real estate, they are better off investing in securitized real estate equity. Of course, the calculation for portfolio managers at a pension fund is quite different. . . There, the trade-off is between the illiquidity of direct ownership versus the benefits of diversifying into the kinds of properties that REITs do not own widely." When asked, "What should the real estate allocation be in the typical retirement plan?" Sinai responded, "A reasonable allocation to real estate would be in the 5 percent to 10 percent range, whether in REITs or direct real estate." Ferreira on PoliticsAssistant professor of real estate Fernando Ferreira was invited to present seminars at Columbia University, the Philadelphia Federal Reserve Bank, Duke University and Catholic University of Rio de Janeiro, focusing on his paper, "Does Political Partisanship Trump the Median Voter? Evidence from U.S. Municipal Governments," written with Joe Gyourko. This study measures the impact of partisan labels on local tax and expenditure policies.Gyourko and Sinai Attract "Superstar" AttentionProfessors Joseph Gyourko and Todd Sinai's concept of "superstar cities" was cited in BusinessWeek Online in "San Francisco, Boston, and Other 'Superstar Cities'"(8/4). The article noted Gyourko and Sinai's opinion that rapidly rising top-tier incomes combine with the limited supply of buildable land in those cities, "so the rich newcomers are pushed out by even richer newer-comers." Gyourko was quoted, "Living in a superstar city is like owning a scarce luxury good." Their work was also featured in the cover story in CNN Money/Business 2.0, in "The New Rules of Real Estate," (11/4), which noted Gyourko's "new study shows investors where to make safe real estate bets during a dangerous market." One success strategy is to invest in "bubble-proof markets," like in Gyourko and Sinai's "superstar cities," where "home prices will keep climbing, as long as incomes keep climbing too." Gyourko's classification of San Francisco as a superstar city was quoted in "Freedom a constant in ever-evolving San Francisco values," in the San Francisco Chronicle (11/4).Joe Gyourko moderated a panel on "Emerging Trends in Real Estate 2007" at a conference at Philadelphia's Union League presented by the Philadelphia District Council of the Urban Land Institute. Gyourko was interviewed for a New York Times (11/5) article, "All Housing Markets Are Local, Except When They're Not," concerning the drop in price for existing homes. Rybczynski HonoredProfessor Witold Rybczynski will receive the 2007 Vincent J. Scully Prize at the National Building Museum in Washington, D.C. Previous recipients of the prestigious architectural award include Jane Jacobs, Robert Venturi, and the Aga Khan. Rybczynski's new book on the historic Miami house, Vizcaya, written with Laurie Olin, will be published in November by the University of Pennsylvania Press. He was a finalist for an On-Line Journalism Award for his architectural commentary in Slate, and has recently been made an honorary member of the American Society of Landscape Architects.Linneman Busy Speaking Across the CountryProfessor Peter Linneman was the keynote speaker at the Tenant-in-Common Association meeting on October 15 in Las Vegas, addressing the state of the economy, its impact on real estate markets and the outlook for real estate pricing and capital flows. He also spoke at the Phoenix Capital Partners Conference on October 18 in Dallas, and moderated a panel, "Where is Real Estate Heading? A Conversation with Industry Leaders," at the CCIM and IREM Success Series, October 20-21 in Tampa. Linneman participated in a panel discussion about the "key trends in mixed-use, walkable urban real estate" on October 27 in Detroit, at the University of Michigan and Urban Land Institute 20th Anniversary Real Estate Forum, and took part in "The Next American Dream: 'The Sam and Peter Show,'" a review of the international real estate industry, with Sam Zell. At Central Penn Business Journal's Second Annual Real Estate Symposium, "Market Outlook: 2007 and Beyond," Linneman was the keynote speaker on November 7 in Harrisburg. He was also interviewed and quoted in an article in the October 30 issue of Pensions & Investments, "Love affairs with leverage could concern investors," by Arleen Jacobius.Wachter Comments on Boomers, New Demographics and Shifting MarketsProfessor Susan M. Wachter was a guest on a number of television and radio shows, speaking about national housing markets. On September 6, she appeared on CNBC's "Morning Call with Liz Claman" talking about the effect of retiring baby boomers on the U.S. housing market. On September 19, she appeared on both Bloomberg TV's "On the Money" and South Africa's MoneyWeb Radio. On September 25, Puget Sound's National Public Radio featured her comments regarding risky mortgages and the real estate market on "Weekday with Steve Scher." The following month she was interviewed for CNBC's "Power Lunch" commenting on Federal Reserve chairman Ben Bernanke's statement that a housing slowdown will reduce GDP growth.Dr. Wachter was quoted in numerous newspaper articles this Fall, including "First-time buyers face hurdles in real estate market," Asbury Park Press (9/15); "Faced with Difficult Adjustments, Homeowners Weigh Their Options," The Christian Science Monitor, (9/25); "Cooling Market a Good Thing, Experts Say," Sarasota Herald Tribune, (9/25); and "A Different Track for Blue Back," Hartford Courant, (9/25). She was also widely quoted in the San Diego Union Tribune, The Houston Chronicle, The Winston-Salem Journal, MSN Money, The Belleville (Ill.) News Democrat, Hemscott UK, Euro2Day Greece and Canadian Business. "From blight to bright: Affordable homes for families," in the Philadelphia Daily News (10/16), cited Prof. Wachter's soon to be released study on what happens to property values after public investments are made. Wachter was also interviewed for the "Econoblog" of the Wall Street Journal Online (10/18), "How Could the Housing Slump Affect the Nation's Economy?" regarding Bernanke's comments on the effect of "the sinking housing market" on U.S. economic growth in the second half of the year. Concerning what's next for the economy, Wachter said, " . . . Soft landing? Bubble bursting? Crash-and-burn? My answer is all of the above." Most U.S. real-estate markets will have "a modest correction." Some markets will have "more severe price declines" because of exotic mortgage instruments; the vulnerable markets with a high proportion of teaser-rate ARMs could have larger declines. She cited her recent research with Andrey Pavlov that showed "aggressive and overly abundant bank lending in certain markets exacerbates the boom and bust cycles there." Wachter presented on "Investing in Real Estate for Long Run Asset Building" to the Trustees' Council of Penn Women's Fall Conference on October 27, speaking broadly about "The Big Picture: Real Estate in Your Investment Portfolio, and Building up Equity in Residential Real Estate."
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