I have taught the same class at SMU’s Cox School of Business since 1988, and I still get excited about the first day of school each fall. In my first MBA class of six was Kim Butler, now the successful and dynamic head of leasing for Hall Financial. Through the years I have had students that went on to do great things in our real estate community—and continue to do so today: Jason Mattox (Behringer), Tony Creme (Hillwood), Chris Miller (iStorage), Elizabeth Nabholtz Allen (RioCan) and Jeff Erxleben (Northmarq), to name just a few.
So, as I begin this first class in 2014, I wonder: Where will these smart young men and women be in 10, 20 or even 30 years? What changes and challenges will they face that maybe I haven’t—and my former students haven’t—yet faced?
Here are some points to ponder about the future, some good, some bad (potentially, very bad.)
1. The good news is students today are smart … very smart (any parent today knows this), and, light years smarter than I was as a senior in college. (I know, it’s not like I set the bar very high.) You teach. They learn. The foundation and desire to learn is there, at least here at Cox it is.
2. Information in the real estate business is now at the touch of a fingertip. Sales, listings, leasing, supply/demand statistics: some free, some costly, but it is out there. With an iPad in hand, these students can get a good flyover of just about any market in the country—commercial and residential—in seconds. When I started, we had to wait months for Roddy to publish his deed records and for Swearingen to tell us about the office market each quarter. It is becoming more and more difficult for real estate to trade or be priced on “insider” information. This is probably a good thing. All efficient markets demand transparency.
3. Right now, money (read: financing) remains on sale. These seniors have been living through an almost unprecedented environment of low interest rates and low inflation. The good news is that these low rates are likely (read: hopefully) to remain at least until they graduate next May. The bad news: these low rates will not last. No one is quite sure what will happen to the real estate market when interest rates and inflation “revert to the mean.” Let’s just hope rates go up because unemployment is (way) down and jobs are plentiful.
4. As noted above, students today are smart and extremely tech-savvy. That should increase productivity on all fronts. But even as I write this, the headline on my home page news feed states “Cyber-attacks are building to the ‘Big One’.” The economic crises my former students and I faced over the last 26 years may pale in comparison to a complete shutdown of a major energy grid, stock market over-ride or any number of global corporate hack jobs. At two major, high-level meetings on cyber security I attended this year, both well-known speakers opened with the exact same quote: “There are two types of companies: those that have been hacked, and those that don’t know they have been hacked.” Lovely thought.
5.These 22± year-old students are graduating into an aging population of real estate professionals. The median age of a Realtor in the U.S. is 57; for professional appraisers, it is just about the same. Based on these data alone, entering the real estate professional today should guarantee success, if not by attrition alone.
So again, I am optimistic for these smart, energetic and young (!) students here at SMU Cox. Optimistic that “but for” rapidly rising interest rates, a cyber-attack of biblical proportions, and/or age defying real estate professionals, they have chosen the right profession, at the right time.
Chuck Dannis is co-founder of Crosson Dannis Inc., which provides real estate appraisal and consultation services for many of the nation’s largest real estate lenders and owners. Contact him at [email protected]