Lecture 12 - Real Estate Finance and Its Vulnerability to Crisis

author: Robert J. Shiller, Department of Economics, Yale University
recorded by: Yale University
published: Oct. 7, 2009,   recorded: March 2008,   views: 4694
released under terms of: Creative Commons Attribution No Derivatives (CC-BY-ND)

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Real Estate is the biggest asset class and of great importance for both individuals and institutional investors. An array of economic and psychological factors impact real estate investment decisions and the public has changing ideas of real estate as a profitable investment. People's demand to buy a home by taking on long-term debt, called a mortgage, is often tied with the overall health of the economy and financial markets. In recessions, home buying tends to fall and the opposite holds in a strong economy. Commercial real estate, held indirectly by the public through partnerships and real estate investment trusts (REITs), is vulnerable to similar speculative activity. The most recent real estate boom illustrates the speculative nature of real estate, and its relation to financial and economic crises.

Reading assignment:

Fabozzi et al. Foundations of Financial Markets and Institutions, chapters 3, 22, 23, 24 and 25

Robert Shiller, Irrational Exuberance, chapter 2


PowerPoint slides from screen - Lecture 12[PDF]

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Reviews and comments:

Comment1 Gert M., June 26, 2010 at 1:04 p.m.:

what idiot was behind the camera? i want to see the charts!!

Comment2 Gert M., July 2, 2010 at 5:45 p.m.:

you'll need this to follow the lecture: http://oyc.yale.edu/economics/financi...

Comment3 ErvinSmith, December 30, 2021 at 11:23 a.m.:

Thank you very much for such an informative lecture. It seems to me that this will help many people to buy real estate correctly. I recently also bought an apartment and was doing repairs. I had no problems with the repair, except for the bath. I have been looking for good workers for a long time and my friend advised me to go to the site https://azreglazing.com/ and through him to hire specialists who will help to make repairs in the bathroom.

Comment4 suzi, May 12, 2022 at 8:22 p.m.:

Hi, RE / MAX Estate Agents is part of a world-renowned brand that operates and mainly covers Canning Town, Playstow, West Ham, East Ham, Barking, Dagenham and other parts of East London. https://realestateagentslondon.co.uk/

Comment5 Maximilian Hohenzollern, February 3, 2023 at 1:33 p.m.:

I wanted to buy an apartment or a house for a very long time, I looked at a lot of options with a realtor, but in the end we settled on an apartment with not very good repair, but in a great area. For repairs, I bought various building materials, for example, 12.5mm plasterboard, in an online store https://www.mgnbm.co.uk/plastering-dr... that was recommended to me by a friend who often repairs something. In general, I'm pleased with the result

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