Final Exam and Final Grades Finally Posted to WebCT

The final exam grades and final course grades have been posted to WebCT. Please note that all Blog Post and Investment Problem extra credit have been included in final course grades.

Exam 3 Grades

There was a one question curve built into your Exam 3 grade (as reported on WebCT). Your grade was calculated by taking the number you had correct plus 1 divided by 44 (the total number of questions).

If I said a two question curve on the Exam 3 review clip, I apologize. I might have rushed a bit to get the Exam 3 review up and ready after the exam.

Exam 3 Scores Posted

Exam 3 grades have been posted to WebCT.

WEEK 8: July 20th with the FINAL EXAM on Saturday, July 25th On-campus

*Review Exam 3 on-line.
*Read Chapters 16 (the final is comprehensive but I will give extra emphasis to Ch. 16), view Investment Problem video/audio clips, do practice problems etc..
*Read Chapter 20 (no video/audio clips for this chapter) and do practice problems etc. (the usual routine).
*Continue to Review Investment Problem (IP) clips. This is an optional bonus problem that will be part of the final exam.
*FINAL EXAM (and Investment Problem Bonus option) is Saturday, July 25th at 10 AM to 12:30 PM in room 147. 
*Please bring your photo ID, pencils, Scan-tron form, and calculator.
*The final is cumulative but emphasis will be placed on Chapter 16.
*The final exam is not mandatory if you do not want or need to improve your three exam scores. It is mandatory if you missed one of the three prior exams.
*You may also take the Investment Problem Exam without taking the final exam.
*Please note that for the IP Exam, you will receive the IP assumption only and you will have to work through the problem without any template or notes.

Exam 3 Review

The review for exam 3 has been posted. Please visit http://www.uta.edu/faculty/hansz/3325/summer/Exam3Sum09.wmv.

I will post scores to WebCT by Monday.

Blog Bonus Submission: Omar Gutierrez

Commercial Real Estate Feeling the Economic Strain
By Omar Gutierrez

The big real estate news of the year is around the declining home market. But has anyone paid attention to all of the office buildings around town with “Office Space Available.”

The commercial real estate market is struggling just as much as the residential market. Many businesses are unwilling to make long term lease commitments for their office space because they are unsure of their future. Those companies can’t really tell how much growth to expect in the next coming quarters, so committing to a standard minimum lease of 5 years may not be a good idea. They may not need all the say they leased, or it may be too small of a space. Real estate brokers and landlords are being forced to adapt to this changing demands of their clients.

The result is many brokers are allowing shorter term leases. In the case of a digital marketing firm Razor-360, they recently rented offices in Addison, TX for only 16 months. Typically, brokers and landlords turned down these types of leases. But in today’s economy, then need to do anything they can to retain tenants and generate income. An empty office space does not generate any revenue, so the tenants are beginning to have more power in the marketplace.

But companies who are confident in their futures are still willing to make those long-term leases. Paul Whitman, who heads Jones Lang LaSalle’s Dallas office said, “I’m working on a transaction right now where we are going to do a 15-year term. They are a company that has a solid feeling about who they are, what they’re going to do and how much space they need.”

Overall, the leasing market is down more than half-million square feet so far this year in the Dallas area. Everyone is trying to do what they can to survive this current economic climate. For those business tenants willing to do a longer term, landlords are wheeling and dealing with rental rates to ensure they have their continued business. But even brokers and landlords are advising tenants to sign shorter term leases if needed. Whitman said, “Would the landlord rather have a longer term? Of course. But they would rather have one year than zero.”

Works Cited

Brown, Steve. “Uncertain about future, companies signing shorter leases.” Dallas Morning News. 26 June 2009. http://www.dallasnews.com/sharedcontent/dws/bus/industries/commrealestate/stories/062609dnbusshorterterms.3bb000e.html

Exam 3 Announcement

Exam 3 tomorrow at 10 AM!

Bonus Blog Post by Amanda Wells

How is Commercial Real Estate in North Texas Holding Up?

It is no secret that the United States has been in a lot of trouble lately when it comes to the real estate market. Residential foreclosures can be spotted in almost any neighborhood and commercial building vacancies are not hard to spot either. Most have probably heard by now that Texas has taken less of a hit in the real estate market than most areas in the US, but a majority of the news is about residential real estate. This led me to examine a less popularized side of the real estate market in today's economy- commercial real estate. This post will examine how commercial real estate in the DFW area is holding up during this economic downturn, both relative to past years in DFW and relative to other areas of the country.

The North Texas commercial real estate market has no doubt seen some decline in the last year. The retail market alone is expected to reach a 13.2% vacancy rate by the end of 2009. This is a rise of 1.8% from last year's rates in DFW, and these numbers are only for commercial retail space (fwbusinesspress.com). Although "retail construction is still chugging along" (viprealtyinfo.com), there have been some declines in the construction of new commercial space. While 6.4 million square feet are expected to be built this year, that is still a decline of 2.6% from last year (fwbusinesspress.com). All of this is, with no doubt, related to recent job losses in the area, and around the US. Not only are companies reducing their payrolls and in need of less commercial building space, but the loss of jobs causes families to spend less, which fuels the cycle of job-cuts and recession.

Still, the DFW area is strong for many reasons. "The DFW market ranks No. 9 among the top 10 investment markets", states one article from Star-Telegram. This is partly related to the fact that North Texas is the home to several large companies, including ExxonMobil, DFW Airport, and AT&T (star-telegram.com). The Barnett Shale and the new Cowboys stadium have also provided many jobs in the area, although these will eventually phase out.

"The report (ranking DFW as No.9) does not paint a pretty picture for the nation's commercial real estate markets. Ongoing drops in property values, more foreclosure and delinquencies, and the limping economy will continue to crimp property cash flows, according to the report" (star-telegram.com). But DFW is expected to thrive and job growth, as well as relatively good commercial occupancy rates, will keep North Texas healthier than the rest of the nation, even if some things have slowed down. Local commercial investors are starting to use some of their saved-up cash to invest in North Texas again, and out-of-state investments are starting to slow, which is bringing the area back to a more normal position (fwbusinesspress.com).

The overall picture that is painted here is that DFW is clearly not recession-proof, as commercial building has slowed from previous years, property values have declined, and vacancy rates have risen. But for many reasons, North Texas is thriving far better than the rest of the United States and businesses should do well. Analysts tag DFW as one of the first markets that will "surge ahead when the economy begins to improve. The DFW market is expected to see signs of growth as early as 2010" (viprealtyinfo.com). All of this is very hopeful for the commercial real estate market of North Texas, as well as the rest of the real estate market in the DFW area.

-Amanda Wells

Sources:

Fort Worth Business Press: "Recession Worries Impacting North Texas Retail Market"

Star-Telegram: "DFW Should Weather Commercial Real Estate Downturn"

VIP Realty: "Dallas Commercial Real Estate"

VIP Realty: "The State of the North Texas Commercial Real Estate Market: What's Next?"

Summer 2009 Drop Date

Last Day to Drop Thursday, July 16, 2009.

Bonus Blog Submission - Kellie A. Brooks

House Flippers, Once Booming, Now Hurting As Well

In today’s economy, every aspect of the real estate industry is struggling. Eric Holbert, is no exception. His house flipping company has taken a dramatic hit in this recession.

“The economy has affected my business tremendously. It is very slow and unpredictable”, Holbert said.

House flipping is purchasing a house or property then selling it for a profit. Most of the properties require some type of remodeling before it can be put back onto the market for resell.

In today’s economy, few people are buying homes let alone refurbishing and reselling them. Holbert’s company, Holbert Custom Services, is one of many that are struggling to stay afloat. In his business, he sells homes to low income families, becoming their landlord. The government pays a portion of the rent and the families pay the balance. These families, already struggling before the recession, are hurting even more.

“My tenants are having trouble keeping their jobs, and they are having trouble paying rent at the same time.” He said.

So how is his company surviving? He has cutback on purchasing additional homes, opted for cheaper fixtures, and he budgeted his personal money in case his tenants aren’t able to pay their part of the rent.

Holbert mainly works in the Fort Worth area.

“The area that I work in is poverty ridden.”

In this industry some people take advantage of low income families, Holbert said. So he does his part to help families in need. Although tenants might struggle making their payments, he chooses these homes because they’re cheap and easier to fix up.

“Real estate has always interested me and I have always thought I could get wealthy from it”, Holbert said.

He looks for homes that are run down, condemned, and not of interest to most realtors or buyers. After Holbert and his team make the improvements, the once dilapidated homes are appealing.

“I look for a house that’s really in bad shape. Then I put a vision of what it can look like and I make it happen.” He said.

The recession will not last forever. So Holbert is trying to position his company to weather the downturn and become profitable again.

“It will improve because we have a great president. I think he is a lot more intelligent than the last president. He understands what it is to be down.”

WEEK 7: July 13th with EXAM 3 on Saturday, July 18th On-campus

*Read Chapters 12, 17, and 18 view video/audio clips, do practice problems etc. (the usual routine)
*EXAM 3 Tuesday, January 6th from 10:00 AM to 11:30 AM in Room 147. Exam 3 will cover chapters 8, 9, 10, 11 (big chapter!), 12, 17, 18, and 19.
Please bring your PHOTO ID, pencils, calculator, and Scan-tron answer sheet.
*TVM Tutorial Final Deadline. Please turn-in at 10 AM. You must complete this or I have to give you an automatic 'F' for the course.

Reminder: Next Exam

The next exam is a week from this Saturday. Just a friendly reminder. Hope you are keeping up this the material!

WEEK 6: July 6th

*Read Chapters 19 and 11 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Please note that Chapter 11 is a very big chapter with lots of additional materials to cover from the website.

Heads-up

Exam 3 contains a large amount of information. Although we will take a couple weeks to cover the material, you must keep up with the assignments each day going forward.

Also, it is important to remember that the final exam is cumulative (will cover the entire course).

TVM Tutorial Completions Posted to WebCT

Your TVM Tutorial status (complete or no complete) has been posted to WebCT.

TVM Tutorial Completions Posted to WebCT

You TVM Tutorial status has been posted to WebCT.

WEEK 5: June 29th

*Review Exam 2 on-line. Link will be posted on the course blog.
*Read Chapters 8, 9, and 10 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*If you are interested in pursuing the Investment Problem Bonus Option, please review the Investment Problem clips this week.
(You will need to start practicing the IP now. Please note that for the IP Exam, you will receive the IP assumption only and you will have to work through the problem without any template or notes.)

Exam 2 Results Posted to WebCT

Exam 2 results have been posted to WebCT. We will use WebCT to review Exam 2 (no audio/video clip for Exam 2).

At your convenience, please log on to WebCT and you will find a new "Exam 2 Review" exam setup under the WebCT category of "Tests." Please take this exam again as a review. You may now submit answers until you choose the correct answer. This review will be available until the end of the summer semester.

Exam 2 On-line this Saturday

Please have your UTA student ID ready and available during the on-line exam on Saturday. Thank you. jah

Exam 2 On-line this Saturday

Exam 2, our on-line exam, will be administered through WebCT this Saturday starting at 9:50 AM. Please logon at 9:50 AM sharp (please note that you may need to refresh your WebCT browser to view Exam 2).

I have a posted a short, three question survey for a little practice with WebCT testing procedures.

GTA Contact Information: 2009SummerClass@gmail.com

Mr. Seo is our Graduate Teaching Assistant for REAE 3325 Online. His main responsibilities will include time-value-of-money tutoring, TVM tutorial grading, and examination administration and grading.

Seo was the TVM Tutor for the Department of Finance and Real Estate so he is an expert with this aspect of the course. If you have any questions about time-value-of-money or the TVM tutorial, you may contact him at 2009SummerClass@gmail.com. You can converse by e-mail, phone, or make a face-to-face appointment. If you would like Seo to call you, please include you phone number in the e-mail.

Exam 2 Scores and Online Practice Module on WebCT

Exam 1 grades have been posted to WebCT. Your WebCT scores include a one question curve. Your grade was calculated by taking the number of correct questions and adding one. This amount is the numerator and the denominator is the total number of questions (35 total questions). All of the exam statistics for the class are also posted on WebCT.

I have not posted TVM completion status. Please give until the end of next week to post TVM completions.

This coming Saturday is Exam 2, our one on-line exam. I have created a very short, three question practice model to make sure we are all using WebCT correctly. When you check your exam score, please go t0 the assignments and tests section and complete this three question model (should take you no more than a minute). Thanks!

WEEK 4: June 22nd with EXAM 2 on Saturday, June 27th On-line

                *Review Exam 1 on-line. Link will be posted on the course blog.
*Individual exam scores will be posted on WebCT.
*Read Chapters 5, 6, and 7 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Exam 2 will be held online on Saturday, June 27th at 10 AM to 11 AM. Exam 2 will cover chapters 2, 3, 4, 5, 6, and 7.
*This exam will be 50 or fewer true-false and multiple-choice style questions.
*You must log into WebCT promptly by 9:50 AM (exam will start at 10 AM).

Exam 1 Review Posted

I have just posted the link for the exam 1 review. You can find this link on our course homepage under the Week 5 assignments.

To link to the exam review wmv file directly, please go to http://www.uta.edu/faculty/hansz/3325/summer/exam1Su09.wmv.

Thanks to everyone for being prepared for exam 1. From an administrative standpoint it went very smoothly.

Seo and I are currently working on grading the exams. I hope to have your Exam 1 scores posted by Sunday night.

Student Question: Qualifying the Buyer

Answer to student question (below):

Let me know if you had any technical difficulties viewing this video. One student has so far but I checked it and it seems to be ok.

The answer to Qualifying the Buyer Problem 1 is on the bottom of the course homepage and pasted below. PI stands for Principle and Interest which is call the 'Debt Service' or mortgage payment. This is calculated using your calculator based on the terms of the mortgage. The MHE starts with PI and adds items like monthly property taxes, insurance, homeowners association dues, and mortgage insurance, if applicable.

Qualifying the Buyer Problem 1:

PI=$614.30 (n=260, i%=.10/12, PV=70,000, FV=0, solve for PMT)

MHE = $614.230+ $84+$21+$24=$743.30

TMD=$743.30+$380+$65=$1,188.30

SMI=$3,200+$240=$3,440

MDR= MHE/SMI = $743.30/$3,440=.2161 --> Make the loan

TDR=TMD/SMI=$1,188.30/$3,440=.3454 ---> Make the loan



Student Question:
On problem 1, in the video for Mortgage Underwriting, i am having extreme difficulty in trying to figure out how you came up with the MHE of $743.22. I'm not sure if i'm completely missing something, but i cant find any information in the text and i have tried several ways of adding up the numbers to try and get even close to that number. Also, what is meant when you say "debt service of $614.23?" Please explain how to calculate MHE. Thanks!