Program Update from Professor Steve Malpezzi

by Stephen Malpezzi, Professor and Lorin and Marjorie Tiefenthaler Distinguished Chair in Real Estate

Students are filtering back, and we’re gearing up for another rocking academic year.  The streets are filled with students and their friends and parents, and vans and trailers full of the necessities of another year in Madison.

Do you miss the reading lists and syllabi you used to receive each September?  Well, you can get a head start at your lifelong-learning ‘semester’ by reading through the little list here at our blog where I posted the latest Top 12 “Reading for Life” entries.  (Comments welcome!)  But I’m writing today mainly to bring you some news. 

Last year, after several turns as Department Chair, and two years as Academic Director of the Graaskamp Center, I turned the Center directorship into the more-than-capable hands of Morris Davis.  I was planning to spend more time on teaching and research.  But (great!) events intervened, and I stepped in as Department Chair once again last fall, when François Ortalo-Magné became our new Dean. 

I’m very excited about the directions François is taking our School.  School-wide initiatives that he’s spearheading focus on increasing the impact of our research on business and public policy; providing a transformational student experience through innovations in the way we teach; and providing faculty, staff, students and all of us with a “Great Platform for Great Work.”  During the coming year you will learn more about these initiatives both through our blog but also the WSB’s website.

Today I’m writing to tell you more about another positive change.  Recently Dean Ortalo-Magné made it official:  my colleagues and I are very pleased that Professor Abdullah Yavas has accepted the chairmanship of the Department of Real Estate and Urban Land Economics.

Professor Yavas is well known among real estate academics as one of the most innovative and productive researchers in our field; several years ago we were very excited to lure him to Madison from Penn State, where he was a stalwart member of their fine faculty for 17 years.   As many readers of this blog already know, Abdullah is also a faculty member of deep experience across a number of other dimensions, including administration; he’s one of only two real estate academics I know who’s served as president of a university!
I know readers of this blog will join François and me, and the rest of our faculty, in congratulating Abdullah, and thanking him for taking on this important responsibility.  Check out Abdullah’s bio, if you have not already done so.

I must make a personal clarification as well.  The LAST time I stepped down as Department Chair (!), I received a number of messages wishing me well in retirement.  Retirement?  Let me be very clear, I am NOT retiring.

I will be doing whatever I can, as so many others will, to support our School and in particular our Real Estate Program’s management team of Abdullah and Center Academic Director Morris Davis, and of course our Graaskamp Center Executive Director Mike Brennan, in the coming year and beyond.  I’ll be expanding my teaching responsibilities, helping the School with the new Business Analytics initiative (including but not limited to improving our students’ Excel skills), and working to focus the efforts of Real Estate and other parts of the School and UW on some important economic development issues.   Forthcoming blog posts will fill you in on some new Graaskamp Center initiatives on economic development, with an initial focus on the Midwest.

This year, in addition to teaching urban economics, I’m excited to be teaming up with Mike Hershberger to teach valuation, and with Erwan Quintin to revive our housing economics class (last taught in 2002!)  As we bring these courses online this fall, we’ll be looking to make good use of the resources François and donors including real estate alum Milo Pinkerton are bringing to the teaching innovation initiatives that François mentions in the attachment.

We have plenty of other news to share, notably the fact that our newest faculty member, Assistant Professor Jaime Luque, is now on campus and preparing his first courses, in urban economics and real estate finance.  You’ve probably already read about Jaime. In the ensuing months, you’ll be hearing much more from Abdullah and Morris, and Mike, and our other faculty and staff, about the state of our Program and our industry.  At the School level, you’ll hear from François and his management team.  Rest assured that you’ll continue to hear from me, too.  After nine years of administrative responsibilities I’m looking forward to a little more time for teaching and research, but I will continue to be actively involved in all aspects of the Graaskamp Center and our real estate Program.  Especially writing more postings for Wisconsin Real Estate Viewpoint!

Home-Price Outlook for the Year

The Wall Street Journal today published the results of a survey of economists and housing analysts conducted earlier this month by MacroMarkets. Among those surveyed was Abdullah Yavas, professor of real estate and urban land economics at the Wisconsin School of Business.

The quarterly survey shows how attitudes for a housing recovery have soured: Last June, economists expected prices would gain by 1.3% this year. “The sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate,” said Robert Shiller, the Yale University housing economist who co-founded MacroMarkets.

Around one-third of panelists expect home prices to increase in 2011. Bill Cheney, chief economist of John Hancock Financial, and Abdullah Yavas, and professor of real estate at the University of Wisconsin, are calling for a 3% annual gain.

"No Home-Price Recovery This Year," WSJ, 3/22/11

"The Big Bank Theory"

This is probably one of the hottest video clips watched in central banks around the globe. When asked about it, Abdullah Yavas, our central bank insider and voting member of the Monetary Policy Committee of the Central Bank of the Republic of Turkey, commented "Central banking is about expectations management, and credibility is one of the most crucial assets of a central bank in managing expectations. It takes years to build credibility, and a wrong policy to destroy it."

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Big Bank Theory
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Well begun is half done: Pleasant surprises in Madison

The new school year has begun, and we are continuing a series that we started last year called Meet Our Current Students where we hear from current real estate MBA students about their experiences in the program. We kick things off in fall 2010 with a post from Class of 2012 MBA candidate Julia Xia:

This was my first trip to the U.S., and I had expected that adjusting to things would be more difficult for me. However, Madison has had this magic power to make me feel at home, and I fell in love with this city at first sight. In fact, it has never stopped giving me little pleasant surprises throughout my first month on campus.

The first surprise is the high quality of the students and the close-knit community. This year, the Graaskamp Center has recruited 3 international students to the real estate MBA program, all graduates from top colleges in their home countries. All first-year real estate MBA students have strong and diverse professional backgrounds in the real estate industry. They hail from private equity funds, development companies, and consulting firms. During the first week, the second-year real estate MBA students welcomed us with a party at a classmate’s home where I got a detailed introduction to school life. I felt that we were already closely connected, and I am glad to be studying along side these smart people.

The school year started with a nice orientation to help familiarize us with the campus, classmates, professors and resources. During the orientation, we had a great night at a welcome reception hosted by Graaskamp Center Assistant Director Sharon McCabe’s home, meeting and talking to the faculty of the Center. I was impressed by their insightful views about the real estate market not only in the U.S. but also in other emerging markets such as China. We have a small group of real estate MBAs which allows the Center to help me reevaluate my career path one-on-one and set the direction for future improvement.

The supportive alumni of the Wisconsin Real Estate Program also gave me a warm surprise. We had a nice welcome party with local alumni during the orientation week, and we connected with some other alumni after that. They took us to a football game; it was the first time I watched an American football game. It’s a great game and has helped me understand the tradition and culture of Wisconsin better. During the recent meeting of the Graaskamp Center Board of Advisors, I had the chance to talk with several leaders about their fruitful experience in the real estate industry. Again to my surprise, everyone was very patient and helpful and shared knowledge from their real estate practice, which I can’t learn anywhere else.

The class schedule is busy but very useful. In the first semester, we are taking general business courses plus one course within the real estate specialization. I feel that all the courses are designed with a purpose to guide us in the real business world and to help us to make effective decisions in our future careers. I especially like Real Estate Finance and Investment. Professor Abdullah Yavas is skilled at teaching the real world applications of our curriculum.

As we say in my country, “Well begun is half done!” I have had a good start, and I’m looking forward to the next two years of life studying here in Madison!

Julia Xia is a first-year MBA student in the James A. Graaskamp Center for Real Estate. Formerly a real estate consultant and asset manager in Beijing, Julia graduated from Peking University with a bachelor's degree in finance and banking.

VIDEO: Experiments in boom and bust periods

Abdullah Yavas, professor of real estate and urban land economics at the Wisconsin School of Business, spoke today in Grainger Hall as part of the ongoing faculty seminar series Rays of Research. His presentation on Asset Characteristics and Boom & Bust Periods was streamed live online. The video is now available to watch on demand--just click here.

Professor Yavas' research interests include real estate brokerage, mortgage contracts, economics of information, and experimental economics. He has published over 50 articles in peer reviewed journals, and his research has also been cited in such popular media outlets as Money, Time, Business Week and Wall Street Journal.