James D. Shilling: Housing Trend Tracker

By Lori Ferguson

1b Jim ShillingAs one of the nation’s foremost scholars on real estate economics, finance and investment, Professor James Shilling has a bird’s-eye view of the real estate field. There’s one thing about which he’s certain: in the last 20 years, things have gotten a lot more complicated.

As part of his appointment, Shilling leads academic research at DePaul’s Institute for Housing Studies, a go-to source for academics, industry leaders and housing policymakers to find data on housing trends, especially those affecting local affordable housing. Shilling’s research addresses such timely issues as the Federal Reserve’s decision to raise interest rates, a topic that’s dominated the headlines in recent months.

“In order to have a strong economy, you need a strong housing market, a fact that has serious implications for the Federal Reserve’s behavior,” he says. “Raising interest rates too quickly could cause the housing market to revert back to its status of a year or two ago, where sales were at one-third of the normal level.” This shift also creates a multiplier effect that can be profound, Shilling explains. “As rates go up, there’s a big risk of sales plummeting, which in turn causes a big slowdown in GDP growth. On top of that, if millennials can’t afford to buy homes, then rents rise, thereby making the entire housing market very tough in terms of affordability.” Shilling also conducts research into such issues as real estate investment trusts and the role of real estate in institutional investors’ portfolios, garnering knowledge that he is eager to share with students.

“Real estate markets have become much more specialized in the last 20 years, and students need more focused knowledge in order to deliver investment advice to clients who need steady returns.”

Furthermore, Shilling says, students need to understand that real estate is not an isolated investment. “Within our MBA program, we offer a host of classes that address various levels of specificity so that students have a good understanding of such vehicles as private equity real estate limited partnerships. There are massive amounts of money at play in the real estate sector these days, and it’s important to keep our students on the cutting edge of knowledge and research. I’m committed to ensuring that DePaul’s program in real estate studies is a model for others to follow.”

Read more: R. David McLean, Investor Behavior Analyst