Module 19 Analyzing Market Areas Flashcards
Neighborhoods and/or districts, generally have an emphasis on land use characteristics, whereas market area is more focused on
the behavior of buyers and sellers of properties that compete with the subject of the appraisal assignment.
The geographic region from which a majority of demand comes and in which the majority of that competition is located.
Market area
A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises.
Neighborhood
A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agrizultural.
District
True of false?
A market area can encompass one or more neighborhoods and or districts.
True
What forces is the appraiser analyzing when identifying a market area?
- governmental/legal
- economic
- social,
- environmental/geographic forces
that permeate the market area which is located.
The way to begin the identification process of a market area is to
start with the physical boundaries of the area.
The analysis of the market area begins by looking at_________-
all the relevant influences being exerted on the property’s value.
What is the purpose of analyzing the market area in an appraisal assignment?
- provides a framework or context, in which the value conclusion is developed.
- Identifies the area that has the greatest influence on the subject property’s use and value.
- Establishes potential limits for data searches used in the approaches to value.
- Helps the appraiser determine the stability of an area and may also indicate future land use and value trends.
Characteristics of Market Areas (4)
Geographic
Gentrification
Change
Life cycle
- geographical boundaries
- change and transition,
- the life cycle of a neighborhood
- Gentrification
Transition is identified with _____, whereas change is broader and encompasses more characteristics. The two can take place at different rates and have different effects on the the same property within a neighborhood.
land use
Change can be short-term or long term, but transition usually
has a long duration.
e.g., agricultural to residential, residential to commercial.
The life cycle of the subject neighborhood helps to define the characteristics of the market area.
The neighborhood
1. gains public favor and acceptance.
2. experiences equilibrium without marked gains or losses
3. diminishing demand
characterized by renewal, modernization, and increasing demand
A process of community change in which middle and upper income persons purchase properties in a neighborhood and renovate or rehabilitate them, causing property values to rise and often displacing earlier, usually poorer residents.
Gentrification
______ usually comes about by an organized (often public) renovation, restoration, or building program.
Revitalization
. Economic
Economic considerations relate to the financial capacity of a market area’s
occupants and their ability to maintain properties. Relevant economic considerations include the floowing:
- Economic profile of residents
- Types of financing available
- Extent of owner occupancy
- Vacancy rates
- Changes in use or economic base
Social
Social considerations
- Population density
- Age and income levels of occupants
- Quality of services
- Crime rate
Time and distance relationship between a particular use and supporting facilites, e.g., between residences and schools, professional service, shopping, and employment.
- The movement of people, goods, services, or communications to and from the subject site, measured by the time and cost involved.
Linkage
The time-distance relationships(linkages) between a property or market area and other destinations include
a. Transportation systems
b. linkages to employment, shopping, schools, recreation, and church
c. topography, soi, climate, and view
d. Land use patterns, density of buildings,
e. Age, type, size, condition, and appearance of structures
f. Adequacy, cost, and quality of services
Appraisers continually discriminate data- such as
discriminating good quality construction from average quality.
Appraisers must be aware that applicable law may prohibit the use of supported and verified conclusions in assignments if
the work leads to discriminatory practice against individuals and groups identified in the table above.
Groups of offices or stores.
Commercial district
- Highway commercial districts
- Retail districts
- Central business districts
- Retail districts
The core, or downtown area, of a city where major retail, financial, governmental, professional, recreational, and service activities of the community are concentrated.
Central business district (CBD)
A shopping center that offiers a variety of general merchandise, apparel, furniture and is built around one or more full department stores. Usually enclosed, with an inward orientation of the stores connected by a common walkway.
Regional shopping center
