Are MBA Programs Hot for Real Estate?

Ever since the housing market took a nosedive in 2008, it seems that every strip of entrepreneur and investor has stayed far and away from the property sector. Whether you’re a finance veteran looking for stable investments in materials holdings, or a young professional seeking entrepreneurship in tech or marketing, it looked for a while that all of America’s best and brightest in business were searching everywhere but real estate.

However, according to new reporting from Bloomberg Businessweek, it appears that today’s MBA candidates are developing a keen eye for the real estate sector. Citing a sea change among graduate programs at America’s top business schools, the article notes that many finance-minded academic institutions are quickly fleshing out their real estate curriculums. The Bloomberg article took stock of Rutgers Business School in particular, which just established a $3 million endowed chair for real estate in anticipation of creating a full-on real estate concentration next year. In an era where many graduate schools are trimming down their programs, and prospective MBA applicants are questioning the market value of a degree, this is no small gesture.

So why exactly are schools devoting newfound attention (and money) to real estate oriented MBA and MSF programs? As a primary motivator, it seems that many businesses and investing bodies have begun to actively scout for young professionals with real estate expertise. The property market is an oftentimes volatile and temperamental sector, and it increasingly pays to have talent on board who are adept at reading the tealeaves. While trying to invest in the property market can make for uneven sailing, economic signs nevertheless point to the housing sector pacing a steady recovery.

To return to the statistics provided by Bloomberg, the amount of MBA programs nationwide that feature a real estate specialization has increased 30% in the past decade. And, not to misappropriate a term too heavily, but real estate investing and financial analysis represent a growth market. An accumulation of economic factors are rallying to make the real estate sector a lucrative field in which to invest. The Federal suppression of national interest rates has only served to encourage prospective homeowners to take out loans on new property, with the volume of homes sold month-over-month climbing notably.

The upside to the volatility in the real estate market is that it can also provides considerable investment return for savvy financiers. While still tentative in its momentum, the housing market is nevertheless returning to stability, and the American housing market has begun to show such strong signs of growth potential that major foreign finance players are actively scoping our urban property. The nationwide value of newly sold homes is climbing too, and the monthly rate of loan defaults is tracing an inverse trajectory. With less and less mortgages underwater, and American consumer confidence making a return, it seems that those with a discerning eye on the property market could well thicken their bottom line.

Overall, we may be looking at a new generation of finance talent that is actively interested in real estate investment and property management. Even for those among us who haven’t chosen to pursue MBAs, it’s good to hear that aptitude with real estate investment is becoming more and more marketable. If the housing market maintains its current recovery, we could well be on the path to seeing property investing become a focus area for America’s keenest finance minds.
Photo: Patricia Drury

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.