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Date of Award

Spring 2012

Degree Name

Bachelor of Arts

Major

Economics

First Advisor

William N. Butos

Abstract

The United States real estate bubble that burst in 2007 has taken the title of the ‘greatest asset bubble’ in the world. ‘Greatest’ however takes on the many meaning of the word in describing this bubble. In the years that the bubble was growing, house prices were continually on the rise and the word ‘great’ couldn’t have better described the profits that were being made. Unfortunately, when the bubble burst, ‘great’ began to mean massive and all-encompassing as forecloses rate became the new chart top statistics as opposed to prices - which were plummeting rapidly. The deflation of this great bubble affected almost all Americans from their homes to their jobs and its repercussions could be ever lasting. However, there are two sectors that make up the real estate market in which one has been showing promising signs of recovery. In this thesis, I will explore three factors (capital, investor qualification, and construction spending) that have allowed the commercial real estate market to get back on its feet and how these two markets differentiate. I will be comparing investor behavior, qualifications and strategies as well as price patterns, availability to capital and construction costs from the years prior to 2007 and up until now. I will do this through in-depth research on the capital structure of the markets, statistically analysis on a wide range commercial and residential data and the informed opinions of those closest to the subject including economists, reporters, and real estate developers, investors and personal. In understanding these two markets, we can look forward on how to repair a sector of the United State economy that shadows the economy as a whole. A return to capital in real estate will be return of security to Americans from their homes to their jobs to their over all economic well being.

Comments

Senior thesis completed at Trinity College for the degree of Bachelor of Arts in Economics. Accessible to members of the Trinity community only.

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