Biography
Tom Thibodeau is the Global Real Estate Capital Markets Professor and the Academic Director of the University of Colorado Real Estate Center in the Leeds School of Business at the University of Colorado-Boulder. In 1980, Tom received a Ph.D. in Economics and an M.S. degree in Statistics from the State University of New York at Stony Brook. After completing his Ph.D., Tom was a Research Associate in the Housing Division of The Urban Institute in Washington, D.C. At the Urban Institute, Tom developed house price indices; developed econometric models designed to explain spatial and temporal variation in house prices; evaluated Federal programs for subsidizing low-income housing; and served as a staff consultant for President Reagan's Commission on Housing. From 1983 through July 2004, he was on the Real Estate faculty at the Cox School of Business, Southern Methodist University. During the 1998-1999 academic year, he was a Visiting Professor of Real Estate at the Wharton School of Business, the University of Pennsylvania, and a Visiting Scholar at the Philadelphia Fed.
Tom is currently the Academic Director of the University of Colorado’s Real Estate Center (CUREC). Tom is responsible for: (1) overseeing the Leeds School of Business real estate curriculum at both the graduate and undergraduate levels; (2) staffing real estate courses with qualified, committed research faculty and instructors; (3) directing the Center’s academic research; (4) facilitating and contributing to real estate industry oriented research; and (5) continuing to develop relationships with members of the real estate industry.
Between 2000 and 2005, Tom was the managing editor of Real Estate Economics. This academic journal publishes scholarly research on current and emerging real estate issues. The publication facilitates communication among academic researchers and industry professionals and seeks to improve the analysis of real estate decisions. Tom also serves on the editorial boards of Journal of Real Estate Finance and Economics, Journal of Real Estate Research, Journal of Housing Research and Journal of Housing Economics. He is a Past President of the American Real Estate and Urban Economics Association (AREUEA) and is a Fellow of the Homer Hoyt Advanced Studies Institute. In 2008, AREUEA awarded Tom the George Bloom Award for “his outstanding contributions to the field of real estate.” In October 2009, the National Association of Industrial Office Properties (NAIOP) Research Foundation Governors appointed Tom a NAIOP Distinguished Fellow.
Tom’s research has been published in numerous nationally recognized refereed journals including Real Estate Economics (formerly Journal of the American Real Estate and Urban Economics Association or AREUEA Journal), Journal of Real Estate Finance and Economics, Journal of Urban Economics, Land Economics, Journal of Housing Research, Journal of Real Estate Research, Housing Policy Debate, Real Estate Review, Real Estate Finance and Property Tax Journal. According to Harzing’s Publish or Perish, Tom’s academic research has accumulated over 2,100 citations in the academic literature (and 545 citations according to the ISI Web of Knowledge). He has seven publications that have each accumulated over 100 citations (according to Harzing’s Publish or Perish). He has the most cited paper ever published in Journal of Housing Economics: “Housing Market Segmentation,” with Allen Goodman, 1998 (224 citations according to Harzing; 80 citations according to ISI); the second most cited paper ever published in Journal of Real Estate Finance and Economics: “Analysis of Spatial Autocorrelation in House Prices,” with S. Basu, 1998 (268 citations according to Harzing; 76 according to ISI); and two papers in the top 30 most cited papers ever published in Real Estate Economics: “Real Estate Investment Funds: Performance and Portfolio Considerations,” with W.B. Brueggeman and A.H. Chen, 1984 (with 167 citations according to Harzing; 42 according to ISI) and “Estimation of Mortgage Defaults using Disaggregate Loan History Data,” with K.D. Vandell, 1985 (with 104 citations according to Harzing; 35 according to ISI). “Evolution of the American Real Estate and Urban Economics Association,” (by P.H. Hendershott, T.G. Thibodeau and H.C. Smith) Real Estate Economics (REE), 37(4):559-599 recognized Tom as one of the most published REE authors during the 1973-2008 period.
Tom is currently teaching Real Estate Finance and Investments and Real Estate Economics in the MBA Program at Leeds. He is also teaching Real Estate Finance and Investments to undergraduates at Leeds. He has taught courses in Real Estate Fundamentals, Real Estate Markets and Valuation, Real Estate Development, Commercial Mortgage Backed Securities, Managerial Economics and Macroeconomics. In the spring of 2009, Tom began teaching an ARGUS-DCF Certification course for University of Colorado (CU) real estate students. ARGUS-DCF is an income property investment/valuation software package that is very popular in the real estate industry. Tom has had 75 students enrolled in five separate ARGUS-DCF Certification classes (a mix of CU undergraduates, CU MBA students, recent graduates and members of the CUREC). 74 of the 75 students passed the ARGUS-DCF Certification Exam on their first attempt. According to ARGUS, this pass rate is unprecedented among ARGUS-DCF Certification classes offered by either ARGUS or by universities.
Tom serves on the Technical Advisor Board for Zillow.com. In addition, he has consulted for the Rocky Mountain Institute, Boulder Tomorrow, the Boulder Area Realtors, the City of Arvada, Colorado, Converium Reinsurance, AIMCO, Criterion Economics, L.L.C., the Town of Greenwich, CT, the Greenwich CT Roundhill Homeowners Association, Fidelity National Information Solutions, International Data Management, Inc., Zurich Reinsurance, Fannie Mae, The Urban Institute, the US Department of Housing and Urban Development and the Government Accounting Office.
Publications
Forthcoming
Authors: Stephen Billings and Thomas G. Thibodeau
This paper empirically examines the extent to which the property tax liability created by financing residential infrastructure using special district bonds is capitalized in house prices. We compare house prices for single-family detached homes built within development districts to similar properties located outside development districts. Our hedonic specification includes the usual housing characteristics and controls for the influence of spatial attributes using Census Block Group 'neighborhood' fixed effects. The preferred empirical specification restricts the data to neighborhoods that have numerous sales of recently constructed single-family detached homes located both within and outside development districts. The empirical results indicate that house prices for homes located within development districts are lower than house prices for similar homes located outside of development districts, but the amount of property tax capitalization is significantly less than full. Results depend on our Generalized Methods of Moments estimator, which instruments property tax rates using the characteristics of development districts. We identify valid instruments by restricting transactions to properties located in rapidly growing suburban developments.
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Working Paper
August 2011
Author: Liang Peng and Thomas G. Thibodeau
This paper empirically examines the segmentation of house price risk across 99 zip-code delineated neighborhoods in metropolitan Denver. The house price risk in each neighborhood is measured with the temporal variation of quarterly appreciation rates of the neighborhood house price index over the 2002 to 2007 period. Cross sectional regressions of neighborhood house price risk on the median household income and the percentage of population in poverty from the 2000 census data for the same neighborhood provide strong evidence that the house price risk is significantly higher in low-income/poor neighborhoods. Sub-period analyses further indicate that the risk segmentation exists in both a booming period (pre 2005:2) and a busting period (post 2005:3). The results indicate that homeownership can be a much riskier investment for low-income/poor households.
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Working Paper
August 2011
Authors: Liang Peng and Thomas G. Thibodeau
This paper empirically analyzes the non-monotonic influence that interest rate changes have on irreversible investment in income producing properties. Using the complete history of quarterly capital improvements for 1,416 commercial properties over the 1978 to 2009 period, we find strong evidence of the non-monotonic effect for apartment, office, and retail properties, but not for industrial properties. For the first three property types, a decrease in the Treasury yield dramatically increases capital improvements when property values are high, but has a weak or negative effect when property values are low. This result has important implications for monetary and fiscal policies.
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Forthcoming
Author: Stephen Billings and Thomas G. Thibodeau
This paper empirically examines the extent to which the property tax liability created by financing residential infrastructure using special district bonds is capitalized in house prices. We compare house prices for single-family detached homes built within development districts to similar properties located outside development districts. Our hedonic specification includes the usual housing characteristics and controls for the influence of spatial attributes using Census Block Group 'neighborhood' fixed effects. The preferred empirical specification restricts the data to neighborhoods that have numerous sales of recently constructed single-family detached homes located both within and outside development districts. The empirical results indicate that house prices for homes located within development districts are lower than house prices for similar homes located outside of development districts, but the amount of property tax capitalization is significantly less than full. Results depend on our Generalized Methods of Moments estimator, which instruments property tax rates using the characteristics of development districts. We identify valid instruments by restricting transactions to properties located in rapidly growing suburban developments.
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Publication
August 2011
Authors: Stephen Billings and Thomas G. Thibodeau
This paper examines the influence that the intrametropolitan growth in special districts has on residential property values. Our empirical approach tests whether the benefits of decentralizing local public good providers increases, decreases or leaves residential property appreciation rates unchanged. Past research in this area has been limited by the lack of variation in government structure within a region and by the self-selection of areas that decentralize governments. This research overcomes these limitations by 1) comparing appreciation rates for single-family homes that were located in areas that added local governments to appreciation rates for properties that were not; and 2) employing an estimation technique that border matches repeat sales to control for the self-selection of government structure. Overall, empirical results indicate that institutional decentralization has no influence on single-family property appreciation rates. It makes no dierence whether the new government is the 3rd, 4th, 5th or 6th new jurisdiction-the new government does not influence appreciation rates. Residential property values for homes located in jurisdictions that added security special districts experienced rates of appreciation that were lower than otherwise comparable properties. Recreation, fire, water, sewer and other special districts had no measurable influence on appreciation rates. Empirical results also indicate that more overlap among local governments reduces appreciation rates. New governments created in areas whose residents have greater income heterogeneity increase appreciation rates. The distance separating the new government from existing governments, the land area of the new government and the creation of multiple new governments have no influence on appreciation rates. Finally, these results depend on the border matching repeat sales estimation technique employed here.
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Working Paper
November 2010
Author: Thomas G. Thibodeau
We examine the influence that intrametropolitan government decentralization has on residential property values.
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Forthcoming
Authors: Liang Peng and Thomas G. Thibodeau
Municipal governments in China established direct control of the supply of urban land in August 2004. This paper examines whether this government action mitigates the efficiency of the residential land market. Using a unique data set of detailed land and residential community transactions with manually collected location information for residential land lots in seven Chinese cities, this paper analyzes the relationship between the land lease prices and residential property prices from the first quarter of 2001 to the fourth quarter of 2007. Results indicate that property prices determined land prices both before and after 2004:3, but the effect was significantly weaker after 2004:3. This is consistent with the hypothesis that the market for residential land became less efficient after municipal governments gained direct control of the land supply
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Publication
November 2009
Authors: Patric H. Hendershott, Halbert C. Smith and Thomas G. Thibodeau
This paper summarizes the 45-year history of the American Real Estate and Urban Economics Association (AREUEA). It describes how AREUEA was created in the mid-1960s by a few academics interested in promoting real estate research. It tracks the Association's growth into a highly respected international association of real estate academics and researchers employed by industry and governments. The paper also examines the activities of its members: officers elected, awards presented, conferences organized and scholars' contributions to its main academic publication—Real Estate Economics. The article identifies the most prolific contributors to the Journal (located both in the US and internationally) and the impact that the Journal's publications have had on real estate research. Finally, we describe how real estate research interests have changed over time.
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Publication
June 2008
Authors: Allen C. Goodman and Thomas G. Thibodeau
In the first half of this decade, US house prices experienced significant real rates of appreciation. The dramatic increase in house prices led some economists to conclude that there was a speculative bubble in the US housing market. This paper explores how much of the recent appreciation in US house prices was attributable to the fundamental economic determinants of house prices. On the demand side, we note that the rate of homeownership in the US increased from 66.8% in 1999 to 69% in the fourth quarter of 2005 1 . Each percentage point increase in the homeownership rate increases the demand for owner-occupied housing by about one million units. On the supply side, land prices and housing construction costs increased substantially in real terms over this period. The national average increase in house prices conceals significant spatial variation in appreciation rates. According to OFHEO, house prices in California cities increased by more than fifteen percent per year during this period while house prices in Texas cities increased four percent per year. The increase in aggregate housing demand had different effects on metropolitan area house prices because housing market supply elasticities vary spatially. We estimate housing supply elasticities for 133 metropolitan areas and conclude that although areas on the East Coast and in California had large observed price increases, they owe much of their house price increases to inelastic supplies of owneroccupied housing.
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Working Paper
August 2007
Authors: Wenbin Li, Thomas G. Thibodeau, and Ying Xaio
During the 2002-2004 period, the Beijing government's procedures for transferring land use rights changed twice in economically significant ways. We examine the effect that these reforms have had on local house prices using a hedonic house price equation and transaction data for newly constructed homes over the 1998-2006 period. We employ five alternative house price specifications to control for spatial variation in Beijing house prices. We observe significant increases in house prices after the August 31, 2004 reform became effective.
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Publication
June 2007
Authors: Allen C. Goodman and Thomas G. Thibodeau
An important question related to housing submarket construction is whether geographic areas must be spatially adjacent in order to be considered the same submarket. Housing consumers do not necessarily limit their search to spatially concentrated areas and may search similarly priced neighborhoods located throughout a metropolitan area when making housing consumption decisions. This paper examines two alternative procedures for delineating submarkets: one that combines adjacent census block groups into areas with enough transactions to estimate the parameters of a hedonic house price equation; and a second that permits spatial discontinuities in submarkets. The criterion used to evaluate the alternative techniques is the accuracy of hedonic house price predictions. The empirical research is conducted using data obtained from the Dallas Central Appraisal District (DCAD). The DCAD provided information for every parcel of real property in Dallas County. As of January 1, 2003, there were approximately 500,000 single-family homes in the DCAD area and 44,000 transactions in the 2000:4-2002:4 period. We find that both submarket constructs significantly increase hedonic prediction accuracy over a standard pooled model, but that neither construct statistically dominates the other. These results have important implications for empirically modeling submarkets within metropolitan area housing markets. Creating housing submarkets by combining spatially adjacent census block groups that lie within the same municipality and same independent school district is time consuming and costly. These results suggest that comparable increases in hedonic prediction accuracy can be achieved by delineating submarkets by dwelling size and median census block group per square foot transaction price.
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Working Paper
August 2006
Authors: Christopher R. Cunningham and Tom Thibodeau
Zoning is often pursued by homeowners seeking to protect themselves from the subsequent introduction of a disamenity on neighboring properties that may negatively affect their home values (Fischel 2001). However, in the many communities the feared disamenity, is not industry or commercial land uses, but simply other housing. absence of zoning protections, developers can mimic these safe guards through restrictive covenants Siegan (1970), and homebuyers can seek out locations near land that is protected from development because of government ownership or the existence of conservation easements, Walsh (2003). We examine the home prices and development activity in several communities in the mountains of Colorado in which the feared disamenity may be additional housing developments. We go on to explore the unsuccessful efforts to pass binding growth management legislation in 2001. The analysis incorporates GIS to construct several novel right hand side variables including the share of housing protected or developed land within a given buffer distance of homes which are included in a hedonic regression framework. Our initial findings are that homebuyers are willing to pay a premium for houses near but not adjacent to protected or conserved land. We also find that homes with a higher share of protected land around them were worth more when there was an increased likelihood that the state would place constraints on rural development.
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Forthcoming
Authors: Allen C. Goodman and Thomas G. Thibodeau
A key question in home construction is whether geographic areas must be spatially adjacent in order to be considered the same submarket.
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Working Paper
August 2005
Authors: Christopher R. Cunningham and Thomas G. Thibodeau
This paper examines the relationship between open space and housing price in a mountain region of Colorado. Recent innovations in information technology have freed a growing number of workers from traditional urban employment centers. This trend, combined with the improving health and activity of retirees, has created substantial demand for housing in areas with special scenic value and access to wilderness. However, too much development may threaten the very amenity that brings people to these areas in the first place. Successful housing development in these communities requires that we identify the premium, if any, homebuyers place on low density housing. In addition, we assess how the legal protection against development is valued by homebuyers in these bucolic settings. This paper utilizes a rich dataset of housing attributes and electronic maps of parcels to identify the effects of housing density and preserved open space on home prices in Summit County Colorado.
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Publication
May 2004
Authors: Brent W. Ambrose and Thomas G. Thibodeau
In the 1980's, housing market analysts and policymakers were concerned that Freddie Mac and Fannie Mae were not adequately facilitating the financing of affordable housing for low- and moderate-income families. To address these concerns, the Department of Housing and Urban Development establish quantitative Affordable Housing Goals requiring the Government Sponsored Enterprises (GSEs) to increase their purchases of mortgages originated by low- and moderate-income households and for homes located in low-income neighborhoods. Our analysis indicates that the goals increased the supply of mortgage credit available to low- and moderate-income households, after controlling for other mortgage market factors. Our analysis suggests that the increase in the supply of low-income mortgage credit occurred primarily in 1998.
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Publication
August 2003
Authors: Norman G. Miller, Michael A. Sklarz, and Thomas G. Thibodeau
This research examines how well nominal income, nominal interest rates and employment explain temporal variation in nominal metropolitan area house prices. Rather than use a traditional model of real house prices, we explain nominal house prices with a measure of "intrinsic" house value that combines local economic factors with an affordable price based upon what the local median income household could afford to pay at prevailing interest rates. The affordable price variable captures local household income trends and current interest rates. We then relate temporal variation in observed house prices to "intrinsic" value and estimate the parameters of separate autoregressive house price models for 316 cities. Like Capozza, Hendershott and Mack [2004], and Abraham and Hendershott [96] before them, we observe that the coastal markets exhibit much greater appreciation/depreciation rates and much more volatility than cities in the central portions of the country. Here we focus primarily on the impact of interest rates on nominal prices in various MSAs, a factor that many housing analyst have pointed to when debating the existence of housing bubbles. Some markets are much more or less responsive to interest rates than others. Supply constraints may explain some of but not all of this increased responsiveness.
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Courses
MBAX 6610: Real Estate Finance and Investments
MBA: Fall 2012
The primary objectives of this course are to: (1) conduct income property investment analyses; (2) develop the technical competence necessary to structure real estate transactions; and (3) understand the financial assets securitized by real estate. The student will analyze income properties using Excel and ARGUS-DCF®. Techniques for structuring real estate transactions examined in this course include lender participations, sale-leasebacks, joint ventures, and real estate syndications. Students are required to use ARGUS-DCF® in this class. ARGUS-DCF® is widely used throughout the real estate industry by equity investors, lenders, commercial brokers, appraisers and property managers to analyze and manage income producing (e.g. apartments and commercial) properties. The students will receive some instruction on how to use ARGUS-DCF® during class. I am also willing to schedule additional sessions for ARGUS-DCF® training. The take home portion of the mid-term exam will require students to use ARGUS-DCF® to analyze an income producing property. The secondary market for mortgages and mortgage backed securities (MBSs) will be examined in some detail. Topics covered include a survey of the private and public institutions that participate in the secondary mortgage market; pooling mortgages to create a MBS; and pricing MBSs. The course will examine both single-family property MBSs and commercial property mortgage backed securities (CMBSs). The homogeneity of the mortgage pool, prepayment risk, and default risk are examined in some detail. The course will also examine real estate investment trusts (REITs) and returns to real estate investments.
Syllabus
MBAX 6630: MBAX 6630: Real Estate Economics
MBA: Fall 2012
The course begins with an overview of residential and commercial property markets. We will identify the underlying economic determinants of real estate supply and demand, market equilibrium and short- and long-run adjustments to disequilibrium (e.g. cycles). The course then describes the three major approaches to estimating real property value: market (or sales) comparison, the income approach, and the cost approach. These techniques will be used to estimate market values for both residential and commercial properties. The course will then examine real estate market behavior. We will examine various theories of land price determination and use these models to understand how the private market allocates land to competing residential, office, retail, industrial/warehouse, hotel and other end users. This course draws heavily from topics taught in traditional urban and regional economics courses and treats real estate like any other scarce resource allocated in a market oriented economy. The student will examine how factors influencing the demand for real estate interact with the factors influencing the supply of real estate to determine market rents and how the flow of future expected income is capitalized to yield the market price of the property. The course will also examine the roles that local, state and federal governments have in real estate market outcomes. Finally, the course includes an examination of three special topics: affordable housing, resort markets, and transit oriented development.
Syllabus
News
Boulder County Business Report
May 9, 2012
Leeds MBA team, Buff One Development, wins 10th annual Rocky Mountain Real Estate Challenge with their proposal to redevelop the 64-acre site. This is the second competition victory for the Real Estate Center in two months.
Leeds School of Business
May 2, 2012
An MBA team from the CU Real Estate Center developed a winning proposal for the former Mile High Greyhound Park in Commerce City at the annual Rocky Mountain Real Estate Challenge.
CNBC.com
March 30, 2012
CNBC.com's Real Estate Outlook takes a look at residential housing markets in the mountain states of Colorado, Utah and New Mexico. The slight 0.2-percent, year-over-year increase in Denver was the third-best showing among the 20 cities tracked in the barometer. Other than Denver, only Detroit and Phoenix showed price increases, at 1.7 percent and 1.3 percent, respectively.
Leeds School of Business
February 1, 2012
The longtime real estate professional will head the CU Real Estate Center.
Leeds School of Business
June 29, 2011
The CU Real Estate team places fourth against 22 other universities in a competition about real-world investment analysis scenarios.
