AG HBU Part 9. Level B Marketability Analysis for Multiunit Property: Steps 4–6

Question 1

The market area currently includes 11,456 apartment units. There are four projects proposed for construction over the next three years. The following is a summary of the four projects and their probabilities:

What is the estimated number of apartment units in three years?
A. 11,456
B. 11,859
C. 11,963
D. 12,262

Answer 1

C. 11,963
[11,456+(230×1.0)
+(116×0.75)
+(300×0.50)
+(160×0.25)]

Course handbook guidance: Part 9, item I.B and Part 12, item I.B

Question 2

Which of the following is an indication the market is in equilibrium?
A. Market rent is above feasibility rent.
B. Residual demand is equal to zero.
C. Supportable demand is less than supply.
D. Vacancy is declining.

Answer 2

B. Residual demand is equal to zero.

Course handbook guidance: Part 9, item II.A

Question 3

Equilibrium vacancy is also known as:

Answer 3

normal vacancy or natural vacancy
= balance of supply and demand

Part 9, page 253