Invest Like a Billionaire Dr. Peter Linneman on AI Myths, the Future of Multifamily Housing & the Shrinking Federal Workforce
Jan 27, 2026
Dr. Peter Linneman, Wharton professor and real estate economist known for Lineman Associates and influential housing research. He unpacks why a shrinking federal workforce shifts labor to the private sector. He explains how rate cuts and capital rotation revive real estate. He explores AI’s realistic productivity effects and why multifamily demand stays strong amid a single-family shortage.
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Shrinking Federal Workforce Boosts Growth
- The federal workforce has shrunk about 9% since 2020, freeing ~300k workers to move to the private sector.
- That shift reduces regulatory drag and can boost long-term private-sector productivity and growth.
Short Rates Likely To Fall Further
- Short-term rates are about 50 basis points too high relative to core inflation, implying more cuts ahead.
- Linneman expects about 100 bps of short-end cuts this year that will stimulate autos, manufacturing, and borrowing-dependent businesses.
Lower Short-Term Yields Send Money To Real Assets
- As short-term safe returns fall, capital will rotate into longer, riskier assets like real estate.
- That rotation drives improved real estate prices when money flows off the sidelines.