Smeal College of Business
The Pennsylvania State University
Department of Risk Management
Risk Management 450
Contemporary Issues in Real Estate Markets
T R 4:15 PM - 5:30 PM
107 Business Building
Fall 2015
Instructor: Lily (Yannan) Shen
Office: 308A Business
Email: yzs131@psu.edu
Office Hour: M 9:30 am -11:30 pm
COURSE OUTLINE AND SYLLABUS
TEXTS:
Ling, David C., and Wayne R. Archer. Real Estate Principles: A Value Approach. Fourth
Edition: NY: McGraw-Hill, 2009. (Required)
Austin Jaffe , and C. F. Sirmans. Fundamentals of Real Estate Investment. Third Edition:
South-Western Educational Pub, 1994. (Optional)
Ambrose, Brent W., and Lusht, Kenneth, Overview of the Real Estate Industry. 2007.
Ambrose, Brent W., and Lusht, Kenneth, Overview of the Commercial Real Estate
Industry. 2008.
COURSE OBJECTIVES AND DESCRIPTION:
This course is an analytical survey of the leading issues associated with the analysis of real
estate markets. This course builds upon the introductory courses, R M 303: Real Estate
Fundamentals or R M 330W: Real Estate Risk Analysis. In this course, we provide an
economic perspective on how and why real estate markets function the way they do. The
course adopts historical, analytical, and contemporary perspectives of several of the central
issues in real estate analysis.
The outline provides a “road map” of the itinerary for this course. We begin with some
introductory topics, and then we evaluate real estate within the urban environment. We
next investigate real property as rights and the regulation of land, including the takings
controversy. The core of the journey takes us to the Real Estate Trilogy: real estate
valuation, real estate investment analysis and real estate finance. We continue with an
assessment of real estate, the financial crisis, and lastly addressing some local real estate
issues in Pennsylvania.
Welcome to the world of real estate analysis!
1
Aug
25
Week
1
Macros Real
Estate Valuation
Fundamentals of
Real Estate
Analysis
27
Exam
Sep
1
2
15
3
T
R
4
T
R
17
22
T
R
10
5
T
R
24
29
Micro Real Estate Valuation
R
3
8
T
6
T
Oct.
1
R
6
T
8
R
13
8
15
20
22
27
T
T
10
R
T
Lecture Content
Slide
s
Date
RM 450 Course Schedule
Topic
Course roadmap
Student background survey
The Nature of Real Estate and Real
Estate Markets (I)
The Nature of Real Estate and Real
Estate Markets (II)
Efficient Market Hypothesis (I)
Efficient Market Hypothesis (II)
Market Determinants of Real Estate
Price (I)
Market Determinants of Real Estate
Price (II)
What Determines Rent and Location
Urban Structures Model
Review for Exam I
Midterm Exam I
Real Estate Valuation I – An Overview
of Real Estate Appraisal
Course Syllabus
Workday: Group Presentation
Real Estate Valuation V - Real Estate
Appraisal: Mass Appraisal 2 (STATA)
;Income Approach 1.
Real Estate Valuation VI - Real Estate
Appraisal: Income Approach 2 (DCF)
Review: Time Value of Money
Introduction to Real Estate
Investment Analysis I (CAPM, NPV,
IRR)
2
Note
HW 1 Posted
1
Chapter 1
1
Chapter 1
HW1 Due
2
EMH Handout
2
EMH Handout
3
News Articles
3
Chapter 5
PR Group
Signup
HW2 Posted
Presentation
signup
HW2 Due
4
Chapter 5
Chapter 5
Exam 1 Review
4
HW 3 Posted
HW 3 Due
5
Chapter 7
Sample Appraisal
Report
Chapter 7
Sample Appraisal
Report
Chapter 7
6
Regression Examples
6
Sample Appraisal
Report
Assigned Chapter
Regression Examples
5
Real Estate Valuation II - Introduction
to Real Estate Appraisal Report
Real Estate Valuation III - Real Estate
Appraisal: Cost and Sales Comparison
Approach
Real Estate Valuation IV - Real Estate
Appraisal: Mass Appraisal 1 (STATA)
Workday: STATA Appraisal Project
Reading
7
Chapter 8
Chapter 14
8
Chapter 14
HW 4 Posted
HW 5 Posted
HW4 Due
Presentation
Slides Due
HW 6 Posted
29
Exam
Nov.
3
5
Review for Exam II
12
R
Midterm Exam II
11
R
Introduction to Real Estate
Investment Analysis II (CAPM, NPV,
IRR)
Presentation: Conveying real
property interests (Group 1)
Forecasting ownership benefits and
value: market research (Group2)
Presentation: The Laws and Contracts
(Group 3)
source of funds for residential
mortgages (Group 4)
Presentation: Real estate breakage
and listing contracts (group 5)
Contract for sale and closing (group
6)
Convey of Real Estate Property Rights
(Lecture)
Thanksgiving: No Class
10
T
12
T
17
13
19
Law and Real Estate
24
Exam
R
T
14
R
26
Dec.
1
T
R
3
T
8
10
TBD
15
R
T
Thanksgiving: No Class
Convey of Real Estate Property Rights
(Game)
Contemporary Real Estate Issues in
Pennsylvania I (Mineral Option)
Contemporary Real Estate Issues in
Pennsylvania II (Mineral Option)
Conclude and Review
Final Exam
Appraisal
Project Due
G1&G2
Chapter 3
Chapter 6
G3&G4
Chapter 9
Chapter 11
G5
&G6
Chapter 12
Chapter 13
HW 5 Due
9
9
10
HW 6 Due
10
Final Review
* All deadlines are announced at least 2 weeks in advance. Plan your schedule wisely. You are
welcome to submit homework, project, and other assignments before the due dates.
COURSE GRADING AND EVALUATION
This course is intended for junior and senior students who are interested in modern real estate
analysis. Therefore, it is expected that students will have sufficient background from basic
economics, finance, and the introductory real estate course upon which to build. The evaluation of
performance in this course will be based upon two non-accumulative midterm exams, one
accumulative final exam, six assignments, one project, one in-class presentations and class
participation. In addition to the textbooks, there will be several handouts used throughout the
semester. There will also be detailed class notes available via ANGEL to accompany the class
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lectures. The details of the exams, assignments will be provided later.
The approximate breakdown between the criteria is as follows:
Examination I
Examination II
Assignments
Appraisal Project
Presentation
Class participation
Attendance
Final Exam
15%
15%
12%
8%
10%
10%
5%
25%
Please note that a student cannot pass this course by failing to take any of the exams independent of
the student’s performance on other elements of the course. No late assignments or projects will be
accepted, unless there is family/medical emergency. Assignment of the lowest grade might be
dropped in favor of the student.
Presentation: each student will have an opportunity to give a 5-10 minute presentation on a real
estate topic. All topics must be approved by instructor. The presentation slides must be submitted
to the instructor a day before the scheduled presentation day by 11:59pm.
Important note: Due to scheduling constraints, no make-up presentation will be permitted
without written documentation of a medical emergency.
Appraisal Project: students will have an opportunity to prepare a comprehensive real estate
appraisal report. Detailed project guidelines will be provided later.
Class participation: participation grades will be assigned based on the question cards collected from
students by the end of every lecture. Both quality and quantity of questions count.
Attendance will be taken at the beginning of every lecture.
Question cards will be collected at the end of every lecture.
Subject to Change Statement: this syllabus and schedule are subject to change in the event of
extenuating circumstances. If you are absent from class, it is your responsibility to check on
announcements made while you were absent.
ADDITIONAL PENN STATE UNIVERSITY REGULATIONS:
ACADEMIC INTEGRITY
According to the Penn State Principles and University Code of Conduct:
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Academic integrity is a basic guiding principle for all academic activity at Penn State University, allowing
the pursuit of scholarly activity in an open, honest, and responsible manner. According to the University’s
Code of Conduct, you must neither engage in nor tolerate academic dishonesty. This includes, but is not
limited to cheating, plagiarism, fabrication of information or citations, facilitating acts of academic
dishonesty by others, unauthorized possession of examinations, submitting work of another person, or
work previously used in another course without informing the instructor, or tampering with the academic
work of other students.
Any violation of academic integrity will be investigated and, where warranted, corrective
academic and/or disciplinary action will be taken. For every incident where a penalty is
assessed, an Academic Integrity Incident Report form must be filed. The form can be
found on the Smeal College Intranet at this URL:
https://intranet.smeal.psu.edu/handi/undergraduate-incident-report-form-aiir/2012-universalacademic-integrity-form.pdf. This form is to be used for undergraduate courses. The
report must be signed and dated by both the instructor and the student, and then
submitted to Gus Colangelo, Associate Dean for Undergraduate Education, 202
Business Building.
Smeal Honor Code:
We, the Smeal College of Business Community, aspire to the highest ethical
standards and will hold each other accountable to them. We will not engage in
any action that is improper or that creates the appearance of impropriety in our
academic lives, and we intend to hold to this standard in our future careers.
PLAGIARISM / COPYING
All work you submit for grading or academic credit is designed to reflect your knowledge
and skill related to the course subject matter. Therefore, unless otherwise indicated, all
work submitted is to be done on an individual basis. This includes but is not limited to
all exams, quizzes, homework, papers, written assignments, and presentations.
Plagiarism is claiming work as your own that you have copied from another person,
whether that other person knows about it or not. This includes copying from web sites
without proper source citation and using homework or papers prepared by current or
past students whether working as an individual or working in a group / team.
AFFIRMATIVE ACTION & SEXUAL HARASSMENT
The Pennsylvania State University is committed to a policy where all persons shall have
equal access to programs, facilities, admission, and employment without regard to
personal characteristics not related to ability, performance, or qualifications as
determined by University policy or by Commonwealth or Federal authorities. Penn
State does not discriminate against any person because of age, ancestry, color,
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disability or handicap, national origin, race, religious creed, gender, sexual orientation,
or veteran status. Related inquiries should be directed to the Affirmative Action Office,
328 Boucke Building.
AMERICANS WITH DISABILITIES ACT
The Smeal College of Business welcomes persons with disabilities to all of its classes,
programs, and events. If you need accommodations, or have questions about access
to buildings where Smeal College activities are held, please contact us in advance of
your participation or visit. If you need assistance during a class, program, or event,
please contact the member of our staff or faculty in charge. Access to Risk
Management courses should be arranged by contacting the Department of Risk
Management Office: (814) 865-4172.
AN INVITATION TO STUDENTS WITH LEARNING DISABILITIES
It is Penn State’s policy to not discriminate against qualified students with documented
disabilities in its educational programs. If you have a disability-related need for
modifications in your testing or learning situation, your instructor should be notified
during the first week of classes so that your needs can be accommodated. You will be
asked to present to the Office of Disability Services (located in 116 Boucke Building
(814) 863-1807) documentation that describes the nature of your disability and the
recommended remedy. You may refer to the Nondiscrimination Policy in the Student
Guide to University Policies and Rules.
Aug. 07, 2015
"The Pennsylvania State University does not discriminate against any person because of age,
ancestry, color, disability or handicap, national origin, race, religious creed, sex, sexual orientation,
or veteran status."
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