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Thursday, Nov. 12, 2008 | Say you bought a house in 2005 and you’re wondering when your home might again be worth what you paid for it.

Norm Miller, real estate professor at the University of San Diego, has an answer: He’s projected out local prices for the next decade or so. And even under the most optimistic scenario he and his colleagues came up with, the median price of a detached house in San Diego won’t return to the 2005 price peak until at least 2016, or “sometime way off the distance,” Miller said.

Miller’s forecast shows no V-shaped recovery, where prices hit a bottom and bounce immediately back, for the regional housing market. Prices have fallen about 30 percent already since the peak, and Miller expects prices could fall another 10 percent and stay there for a while before slowly ascending again.

In coming up with 24 economic scenarios, Miller imagined different interest rate fluctuations and the potential of general economic recession, factored against income and employment. Miller and his team concluded that San Diego’s housing market boom extended far past what can be fundamentally supported, and thus they predict the slow recovery.

That Miller, a preeminent real estate scholar, teaches and researches from a post at USD’s Burnham-Moores Center for Real Estate is a coup the center touts as evidence of its standing on the national stage. Miller came to USD last summer after a quarter-century tenure as the director of the real estate program at the University of Cincinnati. He wrote the book on commercial real estate, among other major national acclamations in a 30-year career.

The center and its dozen or so faculty members have carved out a key niche in the economic and real estate conversations here. Professor Alan Gin’s index of economic indicators have long been a benchmark for the region’s economic health. And Mark Riedy, the center’s executive director, was a national figure in the mortgage industry before launching the university’s real estate institute in the mid-1990s. It was endowed as the center in 2004 and named for two major benefactors and giants in local real estate, Malin Burnham and John Moores.

“This is a real estate town,” said Riedy, who sees the center’s role as a place to discuss real estate trends, not to “play conscience” for an industry. During the boom, conversations in the center’s various forums and panel discussions didn’t try to temper the exuberance of the real estate industry — in fact, some mid-decade meetings proved a platform for some experts to dismiss the notion the real estate market carried the traits of a speculative bubble. Now, though, a few years into a prolonged housing slump, the tone of the forums is considerably less jubilant, but Riedy still convenes the region’s pros along with national experts to share tips and answers to some of their most pressing questions.

Along those lines, the center sees San Diego as a Petri dish of real estate trends, a laboratory for testing new ideas and discussing the big questions of the day in real estate. It enrolls about 20 fulltime students a year in an 11-month master’s degree in real estate, a half-dozen part-time students and professionals in certificate programs. And the school’s prominence in the real estate conversation has come in large part because of its committees, conferences and panels.

They discuss trends like green building, a pet research topic for Miller; a workshop this summer explored the economics of building with sustainable practices and materials and hoped to persuade developers that the concept isn’t just environmentally responsible, but economically better, too. Late last month, the center brought major mortgage industry players together with community advocates to talk about alternative foreclosure solutions for some of San Diego’s worst-hit neighborhoods.

“The real estate industry has been such a big part of San Diego, both commercial and residential development,” said Kelly Cunningham, longtime local economist. “This has always been an industry where the money is made and lost in southern California.”

These are topics of wide interest in San Diego, one of the nation’s most watched housing markets. In related departments, the university recently added economist Ryan Ratcliff from the University of California, Los Angeles Anderson Forecast. And television reporters from 60 Minutes have tapped another USD economics professor, Frank Partnoy, to explain credit default swaps to its audience in a story about the financial crisis.

When Riedy was president of Fannie Mae in the mid-1980s, the idea that the mortgage giant could fail and be seized was unthinkable. But in September, Riedy watched that happen from his post as executive director of the USD center.

It’s not the only previously unimaginable event Riedy’s seen in this downturn. While executives and bankers he’s known for years are now trying to figure out how to help the economy on a national level, Riedy’s trying to listen to and help real estate pros locally. He launched forums nearly as soon as he started working at USD, which previously had one professor teaching real estate principles.

“I was used to putting on programs to educate an industry to bring them all up to the same level,” Riedy said. “I told [the school], ‘We’ve got to put on a program, and invite people up to the hill and let them know we care about the industry.’”

Riedy said he stays in tune with what real estate pros could learn from by touching base in regular meetings with major players in local real estate. In past years, he’s brought in speakers from real estate magnate Sam Zell to a speaker on global demographics and their impact on real estate. But the center’s 13th annual real estate conference in February will focus on financing deals — from the individual home purchase to the wholesale purchase and sale of land for development. That topic comes by overwhelming demand, Riedy said, though he thinks it could be several years before new construction here.

“This year, God knows,” Riedy said. “They’re saying, ‘Just tell us where the money’s coming from.”

Riedy said while perpetual optimism is a hallmark of most real estate pros, most are in “survival mode” these days.

“They’re saying, ‘Don’t tell me how to remodel the house when it’s burning down, and don’t tell me where to put the sprinkler system. Tell me how to get out of the house and not die,’” Riedy said.

Sherm Harmer, a veteran real estate developer here and president of the Building Industry Association, said the school has helped define the discussion about real estate.

“[Riedy] wanted to be the education and the think tank for the business community involving real estate, construction and development, and he’s done a good job,” he said.

Though Harmer sometimes dislikes the reality painted in research from the center, he said research is research. And even though the center is named for two high-profile San Diegans who made a lot of money in local real estate, the school’s work stays independent from appeasing its namesakes.

“It’s very commonly known that you can buy the name of the university but you can’t buy the outcome of their research,” Harmer said.

Riedy said he wants the school to be a place where any opinion has room.

“If somebody has an opinion that the market’s in the toilet and is going to stay there ’til 2020, that’s their opinion,” he said. “I might not always agree, but it’s going to be a tough time, and there’s no pressure from me or anybody else to say otherwise.”

Riedy said he recently spoke to a group of high-end residential brokers in La Jolla. He described what he sees as the future for the real estate market — “that the manure was going to hit the fan” — and many gave him a hard time about his analysis.

But afterward, a handful of brokers approached Riedy.

“They said ‘We think you’re absolutely right, it’s just not in our nature to agree with that,” he said. “And that’s why they’re good at what they do — they always think it’s going to get better.”

Please contact Kelly Bennett directly at kelly.bennett@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

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