298D - Real Estate, the Economy and Capital Markets

Faculty: Gabriel, S.

This course seeks to explore the linkages between real estate, the economy, and the capital markets. In so doing, the course will focus on antecedents and implications of the recent severe fluctuations in the housing and non-residential markets. Further, the course will evaluate the structure, instruments, and institutions of the real estate capital markets, notably including securitization of real estate debt and equity, institutional investment, and emerging markets.

This quarter, the course will further seek to explore the implosion in housing and the real estate capital markets. Accordingly, additional attention will be devoted to housing markets, innovation and related evolution in the housing finance system, system crisis and implications for the macroeconomy and the future of the real estate capital markets. In that regard, note that the past few years have witnessed an approximate halving of residential mortgage-backed security issuance; further, virtually all private label non-conforming MBS issuance has ceased. Similarly, issuance of commercial mortgage-backed securities has imploded, as has issuance of CDOs and other asset-backed derivative securities. The crisis has evolved into a significant tightening of credit underwriting and availability with ongoing adverse implications for valuations and transactions in the residential and non-residential markets. This course will thoroughly explore these issues.

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