Thursday, October 30, 2008

Drop Deadline is Friday

Tomorrow is the drop date deadline. We still have several students who missed both the first and second exams. You cannot miss two exams and pass the course. I have made an attempt to contact these students via UTA e-mail several weeks ago. If you need to drop and have not dropped, you need to drop now. Just a friendly final reminder!

Monday, October 27, 2008

Week 10 Assignments

Week 10 (October 27, 2008):
*Read Chapters 10 and 19 view video/audio clips, do practice problems etc. (the usual routine for each chapter).

October 31st Last Day to Drop a Class

Friday, October 24, 2008

Dprofiler session Saturday if anyone is interested

REAE@UTA will be hosting Doug Maiden Saturday at 11 AM. Doug will be demonstrating a program called Dprofiler which is an amazing piece of technology for anyone interested in real estate development. For more information see:

http://realestateprogram.blogspot.com/2008/09/dprofiler-at-reaeuta-saturday-october.html

Wednesday, October 22, 2008

Mid-semester grades

I was asked by the University about a month ago to submit mid-semester grades for 20 students. I submitted the mid-semester grades several weeks ago so these grades are based on Exam 1 only. Just fyi.

Monday, October 20, 2008

Week 9 Assignments

Week 9 (October 20, 2008):
*Review Exam 2. Click on this link to download a WMV file. (Link will be provided a few days after the exam 2.)
*Read Chapters 8 and 9 view video/audio clips, do practice problems etc. (the usual routine for each chapter).

Saturday, October 18, 2008

Exam 2 Results and Review

The scores for Exam 2 have been uploaded to WebCT. Good job on Exam 2. The class average was 77%.

There was a one question curve (2.5% points) added to your score. Grades were calculated as the number of correct answers plus one divided by 40 (the total number of questions). You can think of the curve as getting a free pass on one (and only one) question.

The exam review audio/video clip has also been uploaded. The link can be found in next week's assignments.

A few words about Exam 3. First, make sure you have the exam 3 date in your schedule. Exam 3 will cover a lot of material. You really need to keep up with the work each week to do well on exam 3! Please keep this in mind.

Also, we had several students who missed the first exam and exam 2. It you missed two exams, it is mathematically impossible to pass this course. If you are facing this situation, you need to drop the course or you will automatically receive a 'F' as a final grade. Please watch the undergraduate drop date carefully.

New Urbanism Event on Campus (free to students)

The Congress on New Urbanism

New Directions: A traditional green future for north Texas
a one day symposium and discussion

Friday October 24

School of Architecture
The University of Texas at Arlington

8:30am -- 5:30 pm

Free and open to students, faculty and staff

No prior registration required

Speakers include:

Jon Hockenyos
expert in economics and public policy

Peter Swift
dynamic leader in the area of walk-able communities

John Norquist
former mayor of Milwaukee, author, and expert in urban issues

Steve Mouzon
author, architect, and President of the New Urban Guild and Original Green.

Friday, October 17, 2008

Student Question

Dr. Hansz,

Will there be any TVM on the test on Saturday?


Brad Motley

RESPONSE
Looking at our chapters for exam 2, I don't see a lot of TVM applications but there are certainly calculation problems (see the prior post).

Student Question - General

What calculations will we need to be able to do?

REPLY

You are responsible for all the material in the assigned chapters. Now, I can safely say that there will not be as many calculation problems as the first exam but you definitely need to bring your calculator. There will be calculation problems on exam 2. Think about some of the topics we covered recently, property taxes, zoning requirements, leases, closing costs,...

Exam 2 in 24 Hours

Exam 2 (Saturday, October 18th from 10 AM to 11:00 AM Room 147)*

*Must bring Scan-tron, financial calculator, pencils, and student ID to all exams.


Please arrive 10-minutes early so we can set up the classroom and start at 10 AM sharp.

Monday, October 13, 2008

Student Question - Property Tax Calculation

Hi Dr. Hansz,

Can you please explain how the answer to chapter 4, number three in the short answer question is $415,600? How do you get to this answer? Thank you in advance for your help.

Regards,

LaTanya Morgan-Diaz


RESPONSE:

Hi LaTanya,

I think you were referring to question number 2 from the Chapter 4 short answer questions. The question is,

2. What is the implied market value of a property that qualifies for a $25,000 homestead exemption in jurisdiction that levies a 24.5 mill tax rate if the annual property tax bill for the property is $9,569.70? Note: I think we can assume, because it was not specified in the question, that assessed value is 100% of the market value estimate (like it is in Texas).

Let me give you another example and see if you can figure out the answer to question 2 base on the example below (hint just work backwards):

A property has an ad valorem value of $475,0000 in a state that requires a 50% assessment ratio (Texas's assessment ratio is 100% but let's use 50% to make it interesting). The property owner qualifies for two exemptions. First, the owner qualifies for a homestead exemption of $25,000. Second, the owner also qualifies for an additional $12,000 exemption because she is over the age of 60. The property tax rates for the jurisdiction are as follows:

County tax 4 mills

School district 11 mills

Hospital 2 mills

Fire department 1 mill

Total tax rate 18 mills or .018 (18/1000)

STEP 1: Calculate the assessed value.

Ad valorem value x assessment ratio = assessed value

$475,000 x .50 = $237,500

STEP 2: Calculate the taxable value.

Assessed value - exemptions = taxable value

$237,500 - ($25,000 + $12,000) = $200,500

STEP 3: Calculate the property tax due.

Taxable value x millage rate = property tax due

$200,500 x .018 = $3,609.00

Week 8 Assignments

Week 8 (October 13, 2008): Exam 2 Week
*Read Chapter 7 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Review for EXAM 2.
*Exam 2 on Saturday, October 18th 10 AM in room 147 Business Building. Exam 2 will cover chapters 2, 3, 4, 5, 6, and 7. Please bring your photo ID,
pencils, calculator, and Scan-tron answer sheet (exam will be 50 or fewer multiple-choice style questions).

Saturday, October 11, 2008

Exam 2: One Week Notice

Exam 2 (Saturday, October 18th from 10 AM to 11:00 AM Room 147)*

*Must bring Scan-tron, financial calculator, pencils, and student ID to all exams.


Please arrive 10-minutes early so we can set up the classroom and start at 10 AM sharp.

Thursday, October 9, 2008

No Office Hours Today

I will be attending the Financial Management Association (FMA) conference today and will not make my office hours from 2 to 4 PM today. I will be checking e-mail and my phone.

Tuesday, October 7, 2008

Exam 2 Coming UP

Just a heads-up. Exam 2 is coming up. A week from this Saturday.

Monday, October 6, 2008

Week 7 Assignments

Week 7 (October 6, 2008):
*Read Chapter 4, 5, 6 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Exam 2 coming soon. Make sure the date is on your calendar.

Monday, September 29, 2008

Student Question

I was just wondering if the review over exam 1 will be up all semester or if there is a way I can download it in order to reference it for the final.

REPLY
I will keep the exam review links up all semester.

Student Question: Mortgage Markets

I have a question for you about this real estate mess that is going on with the market right now. What is going to happen to the people who are signed up for these ARM loans and the rates will be adjusting soon? They're not going to be able to refi because more than likely the value of the house is much lower than the loan they are stuck with. Are they going to be forced into foreclosure? It seems that is the only option for these people in this situation. I know on the Indymac Federal Bank website, they will consider re-writing your existing mortgage if you are in default and going to face foreclosure, but nothing is being done to prevent the problem from reoccurring in a year from now. So, if you have a loan that you know will be a problem in the future, I guess you have to default before you can get help? These loans were still being written two years ago and if you were signed up for a 3 yr ARM, the fun hasn't even started yet. I'm just curious on how you think the future is going to look for these people who are stuck.

REPLY
Yes, what you describe is at the core of this current financial crisis. Way too many people, borrowed way too much money, to buy way too expensive homes. This process was encourage by the Federal government (for several decades, Democrats and Republicans were in a competition to report the highest levels of home ownership during their terms in power) and by government sponsored enterprises, such as Fannie Mae. Federal tax deductible mortgage interest paid on first, and second, mortgages on homes also helps to encourage housing consumption.

The fact that many of these mortgages are adjustable rate is just the icing on the mess. As interest rates increase, you will see a sharp increase in default rates in adjustable rate mortgages. Now the Federal Reserve has to be very concerned about keeping interest rates fairly low which could cause problems with the value of the US dollar and inflation expectations.

These poorly underwritten and often adjustable rate mortgages are clogging-up the financial system because of the expectation that many more will default in the future, making these mortgage bad investments. Financial institutions, and all other owners, holding these mortgages or mortgage-backed securities cannot get them off their books (sell them) because no one wants to buy this junk. One of the few large scale sales of mortgage-backed securities from a while back realized an 80% discount (the purchase paid about 22 cents on the dollar).

My grandfather, who had a lot of old fashioned commonsense and was very conservative with his finances, had an old rule-of-thumb that you should not borrow more than 2 times your gross annual income to buy a house. Although this might be a little too conservative, especially in some of the higher cost of living areas, I would say a maximum of 3 times would be prudent. However, due to the run up in housing prices and lax lending standards, many people have borrowed 4 to 5 times, or more, their annual gross income.

I am afraid that we will continue to see and hear more about foreclosures. However, you don't need to fear that everyone will be out on the streets (this should not be a major concern as long as employment markets holdup). Many of the foreclosures will result in people downsizing to houses and mortgages that are more affordable (from 4 or 5 times gross income to around 2 or 3 times). The average house price in Arlington is around $150,000 so a family earning $50,000 could own a comfortable house under the 3x gross income rule-of-thumb. Finding affordable housing in other areas of the country will be a lot more difficult. If the old school rule-of-thumb of 2 to 3 will in-fact apply, then housing prices in high housing cost markets may have to adjust substantially.

If anyone out there is having difficulty with making mortgage payments, you should contact your mortgage company immediately. Foreclosure is a very expensive process for the mortgagee. It is usually a much better deal for the mortgagee to work something out with the mortgagor (the borrower), if possible. The Indymac website is a good example of a mortgagee willing to work with mortgagors to prevent foreclosures.

Week 6 Assignments

Week 6 (September 29, 2008):
*Read Chapter 3 view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Make sure you have the Exam 2 date on your calendar.

Tuesday, September 23, 2008

Student Question

My question is, if I am happy with my results from exam 1, 2, and 3, must I attend the final, or can that be the one I "miss"? I understand that you do not do makeups, which I am not asking for. I am just wondering if the scores from exam 1, 2, and 3 are sufficient for grading purposes, or must a student attend the final also? I have been in classes over the years that have gone both ways. Some professors require attendance at finals, some allow the final to be missed.

REPLY
If you are happy with your first 3 out of 4 exam grades, you do not have to take or attend the final exam.

Student Question

From reviewing the syllabus for the class, I noted that only 3 exams will be used to determine a students grade. I know the final is cumulative. My question to you is this, if I am satisfied with my 3 exams during the course, must I take the final?

REPLY
You are correct, I take the highest 3 exam grades out of 4. If you are happy with your three exams grades, you do not have to take the final.

Job Opportunity

If anyone is interested, there is an interesting job opportunity in the real estate area. See http://realestateprogram.blogspot.com/2008/09/job-opportunity-at-windstar-properties.html.

Abbreviated Office Hours Today

I have an Undergraduate Assembly meeting today at 2 PM. Typically, I am back at the office around 3 PM, but these meetings vary in length. Please note this if you are planning to stop-in during office hours (2 to 4 PM) today. Sorry for any inconvenience.

Monday, September 22, 2008

TVM Tutorial Completion List Updated 9/22/08

I have posted a list of students that have completed the TVM Tutorial. The link to this list is on our homepage (just below the TVM Tutor information and before the weekly assignments). If you have submitted the TVM Tutorial, please check to see if you have a 'Y' next to your name.

Week 5 Assignments

Week 5 (September 22, 2008):
*Read Chapters 2 and 3 (lots of material in these chapters), view video/audio clips, do practice problems etc. (the usual routine for each chapter).
*Review Exam 1. Click on this link to download a WMV file from course homepage.
*Individual exam scores will be posted on WebCT.
ATTENTION!: If you go to WebCT (www.uta.edu/webct) and log-in with your UTA user name and ID, you should find our class and your Exam 1 score (as a %) posted a couple days after the exam.