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Dr. Andra Ghent joined the Kenan-Flagler Business School in July 2019. As an expert in commercial real estate, she researches how investors decide where to invest and how those investments influenced the cities they invest in.
“In my view, the main cause of the global financial crisis was an asset price bubble,” Dr. Ghent said. “So everything else I think flowed from overly optimistic house price expectations.
“So people, as you’ve heard, thought that house prices would just keep going up. They had unrealistic longterm expectations for house price growth.”
Dr. Ghent’s research found that the crisis wasn’t caused by too many loans given to less qualified borrowers.
“So there was this view that it wasn’t a problem of markets that failed, but rather that the government forced lenders to give loans to low income households. And so we looked at that in a paper. We just found that was not binding at all.”
Dr. Ghent knew she was moving to one of the most educated areas in the country: the Research Triangle.
“If you want to choose a single predictor of the city’s longterm growth,” she said, “you choose cities with high share of college graduates. It’s that simple.
“There’s just no other predictor longterm, and so institutional investors do choose those cities, but that in turn, the choice of where institutional investors go influences that city.”
For Dr. Ghent, one of the things she loves about real estate is the impact investors have on the people that live in the city.
“When I walk around downtown Durham or downtown Chapel Hill, somebody built those buildings and that influenced what shops I can go into, how I interact with my neighbors, how walkable the city is.
“You know, the only thing I don’t love about the Triangle is it’s really not very walkable relative to other places I’ve lived and I’m hoping that will change in the future.”
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