Market Analysis Flashcards
types of data that describe the local market area or neighborhood of the subject property
General Data
types of data which pertain to the subject and comparable properties and also describe individual property values.
specific data
General data that is to be collected by the appraiser from the market place is known as a
PRIMARY DATA SOURCE
Data which has already been compiled and is deemed to be reliable from its source is identified as a
secondary data source
Most specific data are gathered from a: primary data source MLS secondary data source purchased data source
primary data source
The subject property's assessment record would be considered \_\_\_\_\_\_\_\_ data. general data government data specific data verified data
specific data
What type of data would pertain to trends in the local market area? general data specific data sales data preliminary data
general data
The dimensions of the subject property's site would be considered what type of data? preliminary data general data specific data market data
specific data
Which of these would NOT be an example of general data? streets and roads municipal services site size shopping
site size
Market analysis can be divided into two distinct categories for the appraisal process.
A broad based analysis
and an analysis that introduces market segmentation for the study of the supply and demand or a particular property type or commodity is typically the analysis process that most appraisers routinely perform for their assignments.
In a "buyer's market", what would an appraiser expect to see? properties sell faster than normal there are more buyers than sellers rapid price appreciation prices of homes will fall
prices of homes will fall
In a market that has maintained a state of equilibrium, what would an appraiser expect to see? properties sell faster than normal home prices remain stable rapid price appreciation there are more sellers than buyers
home prices remain stable
What does USPAP state about cost? it is an opinion developed by an appraiser it is a fact, or an estimate of fact it is the same as value it is always less than value
it is a fact, or an estimate of fact
In the purchase of a residential property, how does the principle of anticipation apply to the buyer’s actions?
a buyer typically anticipates that cost is greater than value
a buyer anticipates receiving a positive cash flow from renting the property
buyer typically anticipates the value of the property will increase
a buyer anticipates that cost equals value
buyer typically anticipates the value of the property will increase
When writing an appraisal report, charts and graphs may be used to replace parts of the narrative explanation.
True
False
True
Where should an appraiser document his or her data verification sources? in the MLS in the engagement letter in the letter of transmittal in the workfile
in the workfile
When we refer to “purchasing power”, which question are we asking?
Who would be the typical purchaser for this property?
Does this property generate enough income to motivate an investor to purchase it?
Are prospective purchasers able to purchase this property?
Is there a property in the market that a typical buyer would want to purchase?
Are prospective purchasers able to purchase this property
An announcement of the closing of an industrial plant that is the region's major employer would likely result in: increasing property values a seller's market a buyer's market balance
a buyer’s market
In a “seller’s market”, an appraiser is likely to find:
increasing marketing times
balance
increasing property values
large inventories of available properties
increasing property values
What is the likely result of an announcement of the closing of an industrial plant that is a region's major employer? decreasing property values shorter marketing times a seller's market a balanced market
decreasing property values
Questions about balance must be answered by the appraiser in order to:
fill out the appraisal report form
determine adjustments for room count and square footage
measure the trends of the market area
determine which comparable sales to use
measure the trends of the market area
Conclusions derived in the market analysis phase of the appraisal assignment can be used in which approach to value? Income Approach Cost Approach Sales Comparison Approach all of these
All of these
In a market area, there were 168 single-family sales last year, and there are currently 98 properties on the market. How long will it take to sell this existing inventory? 12 months 8 months 14 months 7 months
7 months
Absorption rates and periods
168/12 = 14 per month
98/14 = 7 months
The revitalization period of a neighborhood's life cycle is also called recapitalization period renewal period stability period revulsion period
renewal period
There were 24 sales in a subdivision in the last year, and there are currently 10 properties on the market. What is the monthly absorption rate? 2 per month 5 per month 1 per month 12 per month
2 per month
If the market achieves balance, or equilibrium, it is considered to be: growing declining stable none of these
stable
In a market area, there were 168 single-family sales last year, and there are currently 98 properties on the market. What is the monthly absorption rate? 12 per month 8 per month 14 per month 24 per month
Absorption Rates and Periods
14 per month
168/12 = 14
What is another name for "average"? mean median mode standard deviation
Mean
How would an appraiser estimate the estimated length of time it will take to sell the existing available inventory in a market?
absorption rate
standard deviation
expired listing ratio
Absorption rate
In a neighborhood, there were 122 single-family sales last year, and there were 52 expired listings that did not sell. What is the expiration ratio for this area? 12% 39% 70% 30%
30%
Expiration Ratios
122 + 52 = 174
52/174 = 29.89%
What is the preferred method of estimating site value for residential properties? Absorption rate Capitalization of ground rent Sales Comparison method Surrogate method
Sales Comparison Method
Which of these is NOT an accepted method of estimating site value? allocation technique A Capitalization of ground rent Sales Comparison Approach surrogate method S
surrogate method s
During which period in a neighborhood's life cycle will there be a strong demand for additional community infrastructure? stability decline growth all of these
growth
Growth translates into increased supply to satisfy the demand for a certain type of housing in a particular area. Growth translates into the demand for more social services to be supplied by the community.
How might an appraiser determine if a neighborhood is in the decline phase of its life cycle?
analyze the ratio of owner occupied-properties to tenant-occupied properties
analyze trends in property tax rates
analyze changes in the racial composition of the neighborhood
all of these
analyze the ratio of owner occupied properties to tenant occupied properties
Which period in a neighborhood's life cycle will mean a demand for more social services to be supplied by the community? stability growth decline all of these
growth
the analysis of the circumstances surrounding typical buyers versus sellers and investors versus tenants in a particular area.
market study
the analysis of a specific property type in a defined area and involves rate differentials measuring the absorption rates for a particular type of property in a given area.
marketability study
Examples of general data include all of the following EXCEPT: square footage transportation schools employment
square footage
Most specific data are gathered from a: primary data source MLS secondary data source purchased data source
primary data source
Data that has already been compiled and is deemed to be reliable is: purchased data MLS data secondary data source none of the above
secondary data source
How might a local community entice a buyer to purchase a blighted property and revitalize it? special assessments offer fewer municipal services reduced tax assessment rent controls
reduced tax assessment
The real estate life cycle applies to: entire communities individual properties subdivisions all of these
all of these
Discussions of supply and demand in the housing market always return to the principle of: substitution balance conformity contribution
balance
In a "seller's market", an appraiser is most likely to find: declining property values increasing marketing times balance small number of properties available
small number of properties available
A neighborhood in the decline phase of its life cycle may reach a point where the most likely buyer for properties will be: retired persons investors unemployed persons large families
investors
