Exuberant Bubble or Fundamentally Sound Where are Real Estate Prices Going

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Exuberant Bubble or Fundamentally SoundWhere
are Real Estate Prices Going?
With Guest Speakers Peter F. Korpacz, MAI
Robert A. Knakal Frank Nothaft, Ph.D.
Presented Jointly by
The Metro NY Chapter Appraisal Institute Mark
Pomykacz, MAI President
Steven L. Newman Institute Baruch College Barry
Hersh, AICP Associate Director
Friday, September 30, 2005
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The Panelists

• Peter F. Korpacz, MAI,
• Director of the Global Strategic Real Estate
  Research Group of PricewaterhouseCoopers (PwC),
• Robert A. Knakal
• Founding Partner of Massey Knakal Realty
  Services.
• Frank E. Nothaft
• Chief Economist for Freddie Mac

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Introduction

• Mark Pomykacz, MAI
• President of the Metro NY Chapter of the
  Appraisal Institute
• Managing Partner of Federal Appraisal
  Consulting LLC
• Real estate and business appraisal and advisory
  firm
• Member of the National Board of Directors of the
  Appraisal Institute
• Teaches Income Capitalization, USPAP and Seminars
  for the Appraisal Institute and New York
  University
• State certified general real estate appraiser in
  six states
• Published several articles on appraisal and
  property taxes
• Specializes in the appraisal of complex issues,
  such as IRS, SEC and other financial reporting,
  and in the appraisal of complex properties and
  assets such as utilities, power plants and
  telecommunications assets

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Exuberant Bubble
Background

Fundamentally Sound
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PRECEPTION vs REALITY

• Just the facts, Maam
• Talking about it, can make it happen

"That greater tendency toward self-correction has
made the cyclical stability of the economy less
dependent on the actions of macroeconomic
policymakers, whose responses often have come
too late or have been misguided, the Man,
Tuesday, Sept 27, 2005
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New York Times Articles
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Wall Street Journal Articles
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New York Times vs. Wall Street Journal
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New York Times and Wall Street Journal
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New York Times vs. Wall Street Journal
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New York Times vs. Wall Street Journal
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Appraisers in Action

• Survey of Members
• of the
• Metropolitan Chapter
• of the
• Appraisal Institute

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Housing Bubble Survey Chart 1
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Housing Bubble Survey Chart 2
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Housing Bubble Survey Chart 3
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Housing Bubble Survey Chart 4
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Housing Bubble Survey Chart 5
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Housing Bubble Survey Chart 6
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NCREIF vs. CPI Chart 1
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NCREIF vs. CPI Chart 2
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Are we in a bubble?
History cautions that extended periods of low
concern about credit risk have invariably been
followed by reversal
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Are we in a bubble?
Translation What! Where yous been livin? In
a bubble! And Dont touch my hair
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I got a bridge to sell