Real Estate Observatory
The Real Estate Observatory is an online platform for monitoring international real estate markets in order to identify real estate bubbles, forecast their tipping points, and provide early warning indicators of such events.
The REO gathers international real estate indices and other relevant macro-economic factors (such as GDP, interest rates, mortgage debt, and capital flows), and applies state-of-the art quantitative techniques to provide an integrated scientific view of the global real estate market. The methods encompass non-linear techniques developed in our group, as well as other bubble indicators proposed in the literature of real estate bubbles. The results will be available through this online platform and will be updated quarterly.
Background to the Real Estate Observatory
Building on decades of fundamental research in the dynamics of financial and real estate markets, we will provide a reliable and unbiased monitoring platform for the global real estate market.
Since 2010, Prof Sornette has been leading a far-reaching initiative, the Financial Crisis Observatory (FCO), for global equity markets. This is a scientific platform aimed at testing and quantifying rigorously, in a systematic way and on a large scale the hypothesis that financial markets exhibit a degree of inefficiency and a potential for predictability, especially during regimes when bubbles develop. The FCO has proven to be invaluable and trustworthy resource for our existing private-sector partners. By focusing on the specificities of the real estate markets, the REO will build upon and extend these technologies, to provide up-to-date research on the dynamics of the global real estate markets.
We have started a collaboration with comparis.ch in 2012 to provide bi-annual reports of the state of the Swiss real estate market to empower the buyers and sellers of this market with critical information on price dynamics in every Swiss district. This effort has been supported by the Swiss Commission for Technology and Innovation (CTI) in its launching phase and is partially funded by comparis.ch. The results of this work have already proven to be of great value and the bi-annual reports have been cited by numerous Swiss and international media.
Didier Sornette leads the Chair of Entrepreneurial Risks at ETH Zurich. He is also a Professor of Finance at the Swiss Finance Institute, and an associate member of both the Physics and Earth Sciences Departments at ETH Zurich. In addition, he is an Honorary Professor at the School of Business and Research Center of Systems Engineering, East China University of Science and Technology, and he is a fellow at the American Association for the Advancement of Science. Prof. Sornette is a founding member of the ETH Risk Center, the competence center that plays a central role in ETH Zurich’s Global Risk Initiative. His Group’s research focuses on the prediction of crises and extreme events in complex systems and the diagnosis of systemic instabilities. Prof. Sornette has authored hundreds of highly cited journal papers and a number of books. His most acclaimed title, Why Stock Markets Crash, has been described by Nobel Laureate, Robert Shiller, as mind‐expanding reading.
Dorsa Sanadgol is the head of real estate research, and leads the development of an innovative platform for collaboration, prediction markets, and frontier statistical analysis tools at the chair of Entrepreneurial Risks. She holds a PhD in Mechanical and Aerospace Engineering from the University of Virginia and an MAS in Management, Technology and Economics from ETH Zurich.