Module 19 Analyzing Market Areas

Question 1

Neighborhoods and/or districts, generally have an emphasis on land use characteristics, whereas market area is more focused on

Answer 1

the behavior of buyers and sellers of properties that compete with the subject of the appraisal assignment.

Question 2

The geographic region from which a majority of demand comes and in which the majority of that competition is located.

Answer 2

Market area

Question 3

A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises.

Answer 3

Neighborhood

Question 4

A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agrizultural.

Answer 4

District

Question 5

True of false?

A market area can encompass one or more neighborhoods and or districts.

Answer 5

True

Question 6

What forces is the appraiser analyzing when identifying a market area?

Answer 6

1. governmental/legal
2. economic
3. social,
4. environmental/geographic forces

that permeate the market area which is located.

Question 7

The way to begin the identification process of a market area is to

Answer 7

start with the physical boundaries of the area.

Question 8

The analysis of the market area begins by looking at_________-

Answer 8

all the relevant influences being exerted on the property’s value.

Question 9

What is the purpose of analyzing the market area in an appraisal assignment?

Answer 9

1. provides a framework or context, in which the value conclusion is developed.
2. Identifies the area that has the greatest influence on the subject property’s use and value.
3. Establishes potential limits for data searches used in the approaches to value.
4. Helps the appraiser determine the stability of an area and may also indicate future land use and value trends.

Question 10

Characteristics of Market Areas (4)

Answer 10

Geographic
Gentrification
Change
Life cycle

1. geographical boundaries
2. change and transition,
3. the life cycle of a neighborhood
4. Gentrification

Question 11

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.

Answer 11

land use

Question 12

Change can be short-term or long term, but transition usually

Answer 12

has a long duration.

e.g., agricultural to residential, residential to commercial.

Question 13

The life cycle of the subject neighborhood helps to define the characteristics of the market area.

Answer 13

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

Question 14

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.

Answer 14

Gentrification

Question 15

______ usually comes about by an organized (often public) renovation, restoration, or building program.

Answer 15

Revitalization

Question 16

. 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:

Answer 16

1. Economic profile of residents
2. Types of financing available
3. Extent of owner occupancy
4. Vacancy rates
5. Changes in use or economic base

Question 17

Social

Social considerations

Answer 17

1. Population density
2. Age and income levels of occupants
3. Quality of services
4. Crime rate

Question 18

Time and distance relationship between a particular use and supporting facilites, e.g., between residences and schools, professional service, shopping, and employment.

2. The movement of people, goods, services, or communications to and from the subject site, measured by the time and cost involved.

Answer 18

Linkage

Question 19

The time-distance relationships(linkages) between a property or market area and other destinations include

Answer 19

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

Question 20

Appraisers continually discriminate data- such as

Answer 20

discriminating good quality construction from average quality.

Question 21

Appraisers must be aware that applicable law may prohibit the use of supported and verified conclusions in assignments if

Answer 21

the work leads to discriminatory practice against individuals and groups identified in the table above.

Question 22

Groups of offices or stores.

Answer 22

Commercial district

1. Highway commercial districts
2. Retail districts
3. Central business districts
4. Retail districts

Question 23

The core, or downtown area, of a city where major retail, financial, governmental, professional, recreational, and service activities of the community are concentrated.

Answer 23

Central business district (CBD)

Question 24

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.

Answer 24

Regional shopping center

Question 25

Typically a shopping center that offers a wider range of apparel and other soft goods than neighborhood centers. Among the more common anchors are supermarkets, super drugstores, and discount department stores.

Answer 25

Community shopping center

The primary trade area extends out from the center about 3 - 6 miles

Question 26

A local shopping center with a gross leasable are generally ranging from 30,000 to 150,000 square feet. A neighborhood shopping center offers consumable goods and personal services, and it usually serves a trade area within 3 miles of its location

Answer 26

Neighborhood shopping center.

Question 27

Industrial districts. The following considerations are important for industrial districts;

Answer 27

1. Availability of labor
2. Availability of materials
3. Distribution facilities

Question 28

Specialty districts include:

Answer 28

1. Medical districts
2. Research and development parks
3. High technology parks
4. Education districts
5. Historic districts

Question 29

An appraiser is analyzing a market area considering the four forces that influence market value. Which of these forces do “linkages” fall under?

Answer 29

Environmental and geographic

Question 30

Appraiser Mills described the market area as a blue-collar area with good pride of ownership in the area residences. This is an example of

Answer 30

stereotyping