Chapter 1: Market Fundamentals, Characteristics, and Definitions Flashcards
“A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises.”
Neighborhood
“The geographic region from which a majority of demand comes and in which the majority of competition is located. Depending on the market, a market area may be further subdivided into components such as primary, secondary, and tertiary market areas, or the competitive market area may be distinguished from the general market area.
Market Area
“A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural.”
District
A study of the market as a whole and the investigation of conditions of a component of that market as reflected for a specific property type
Market Analysis
"A place where goods and services are exchanged" is the definition of a: retail district market neighborhood store
Market
"The separation and identification of the parts of the whole" is part of the process of: highest and best use aggregation using the Internet analysis
Analysis
When an appraiser is analyzing the subject property’s market area, which question is LEAST likely to be asked?
Where is the property located?
What defines the boundaries of the property’s neighborhood?
Who owns the property?
What are the trends for this neighborhood?
Who owns the property?
Today, if an appraiser has an “oddball” appraisal assignment and there is no local data, the appraiser can:
use the Internet to research data or contact other appraisers for data
make up the data, and use the Internet to make it seem more realistic
use Internet data to create a smaller submarket within the local market
withdraw from the assignment and use the Internet to find another appraiser to do it
Use the internet to research data or contact other appraisers for data
When an appraiser is analyzing the subject property’s market area, which question is MOST likely to be asked?
Why is the subject property being sold?
What defines the boundaries of the subject property’s neighborhood?
Who owns the subject property?
What is the subject property’s condition?
What defined the boundaries of the subject property’s neighborhood?
a) Projected income to be received;
b) Using the property as a tax shelter;
c) Probable appreciation of the asset; and
d) Use of the property for a personal business.
These are the benefits of what?
From income producing properties
Which principle is often associated with the income approach?
Anticipation
The principle of anticipation is also related to the principles of:
Supply and demand
Competition
Change
The principle of balance is closely related to the following principles:
Four agents of production
Conformity
Contribution
Surplus Productivity
The principle of change is related to the following principles:
Anticipation
Supply and Demand
Inclining and declining periods
The principle of competition relates to the following principles:
Anticipation
Supply and demand
Opportunity Cost
The principle of conformity is related to the following principles:
Balance and regression
The principle of contribution is related to the following principles:
Balance
Four agents of production
Substitiution
The principle of externalities is related to the following principles:
Inclining and declining periods
Progression and regression
Supply and demand
The four agents or production are:
Capital (Buildings and Equipment)
Coordination (Management)
Labor (Wages)
Land
The principle of the Four Agents of Production is related to the following principles:
Balance
Contribution
Opportunity Cost
Surplus Productivity
The value of a single-family home is decreased when a large industrial plant is constructed directly across the street. What economic principle does this best demonstrate? Balance Contribution Externalities Anticipation
Externalities
Perceived benefits from the ownership of income-producing property would include all of the following EXCEPT: income to be received appreciation physical depreciation tax shelter
Physical Depreciation
With regard to the four agents of production, which is the last agent to be satisfied? Capital Land Labor Coordination
Land
The fact that a property's value may be different next week than it is today demonstrates what economic principle? Change Balance Anticipation Competition
Change
When supply and demand are in balance in a market, this produces: Anticipation Appreciation Equlibrium Depreciation
Equilibrium
People tend to purchase homes in areas with amenities and facilities, and where they feel insulated from adverse property conditions. This is an example of the principle of: Conformity Substitution Change Competition
Conformity
A property owner constructs a six-car garage at a cost of $80,000. It only adds $40,000 in value to the property. What economic principle does this best demonstrate? Balance Change Contribution Opportunity Cost
Contribution
The principle of contribution is most closely associated with: the Income Approach the Sales Comparison Approach the Cost vs income Approach the principle of Opportunity Cost
the Sales Comparison Approach
Finish the sentence: Profit encourages \_\_\_\_\_\_\_\_\_\_\_. profit declining markets copycats competition
Competition
Appraiser Anne wants to convert a property's anticipated income into an indication of value. Which approach to value is best suited for this purpose? Anticipation Approach Income Approach Sales Comparison Approach Cost Approach
Income Approach
Four stages of the life cycle:
Growth, Stability, Decline, Revitalization
Integration and Disintegration are sometimes referred to as _____ and ____ periods
Inclining, declining
Opportunity costs relates to
the advantages of an alternate investments
The consistent use theory recognizes:
a property’s componenets
The value of a fair quality home will be enhanced if it is located in a neighborhood of all good quality homes. What economic principle does this demonstrate? Substitution Progression Anticipation Regression
Progression
