Stern Program for Undergraduate Research

Research ID: RS000064
Research Title: Single-family housing as an investable asset class
Description: The recent housing bust has seen nationwide house prices decline by as much as 30%, with even greater declines in some areas. The foreclosure crisis that ensued has presented an investment opportunity for institutional investors to buy houses cheaply in the hope of either selling them when the housing market recovers (some players have started to do this) or renting them out for the medium to long-run. The latter could signal the beginning of a new trend of declining home ownership in the United States. The research project would document this new investment activity in detail (including its geography), describe the returns earned for those early participants, analyze return correlations with other segments of the housing and commercial real estate markets, as well as with equity REITS and the stock market. The study could dive more deeply into the business model of renting out single family homes (maintenance issues, cash-flow analysis, innovation in contractual agreement with the renter), and discuss its implications for home ownership in America.
Relevant Areas of Study: Actuarial Science
Economics
Finance
Operations Management
Statistics
Pre-requisites: Basic finance course work required. Real estate coursework highly recommended.
Start Semester: Spring 2013
Credits Per Semester: 1.0
Faculty Member: Stijn Van Nieuwerburgh (svnieuwe@stern.nyu.edu)
Department Affilation: N/A
Contact: Stijn Van Nieuwerburgh (svnieuwe@stern.nyu.edu)
Expired On: 05-01-2013