Using the Market Analysis Ch 3 Quiz

Question 1

A community’s total employment is 29,120. The number of total core industry employees is 18,200. If the core industry adds 450 more jobs, how many additional jobs will be generated in the community?

Answer 1

270. Chapter 3, “Steps in the Analysis Process”: 29,120 / 18,200 = 1.6. 450 x 0.6 = 270

Question 2

A community’s total employment is 29,120. The number of total core industry employees is 18,200. What is the base core multiplier?

Answer 2

1.6. Chapter 3, “Steps in the Analysis Process”: 29,120 / 18,200 = 1.6

Question 3

A community’s total employment is 52,220. The number of total core industry employees is 37,300. For every 10 jobs added in the core industry, how many additional jobs will be generated in the community?

Answer 3

four. Chapter 3, “Steps in the Analysis Process”: 52,220 / 37,300 = 1.4. For every 10 new core employees hired, four additional jobs will be generated throughout the community as a spin-off from those core business or industry employees.

Question 4

A community’s total employment is 52,220. The number of total core industry employees is 37,300. If the core industry adds 920 more jobs, how many additional jobs will be generated in the community?

Answer 4

368. Chapter 3, “Steps in the Analysis Process”: 52,220 / 37,300 = 1.4. 920 x 0.4 = 368

Question 5

A community’s total employment is 52,220. The number of total core industry employees is 37,300. What is the base core multiplier?

Answer 5

1.4. Chapter 3, “Steps in the Analysis Process”: 52,220 / 37,300 = 1.4

Question 6

A custom-built high-quality home is currently listed for sale, and is the only high-value home on the market in its area. The current owner/builder was a single man who disliked his family; consequently he built a one-bedroom home to discourage any of his grown children from moving back in with him. Which statement is true?

Answer 6

Even though it is the only home for sale, if it does not meet utility requirements of buyers, it has a lower value.

Question 7

A property suffers from functional obsolescence because it has four bedrooms and only one bathroom. Installation of a second bathroom would cost $10,000 and would increase the value of the property by $12,000. This functional obsolescence is:

Answer 7

curable

Question 8

A property suffers from functional obsolescence because it has outdated single-pane windows. Installation of new multipane windows would cost $24,000 and would increase the value of the property by $20,000. This functional obsolescence is:

Answer 8

incurable

Question 9

A two-story home measures 32 feet by 41.5 feet on the exterior. There is an open two-story foyer area which measures 12 feet by 12 feet. What is the gross living area (GLA) of this home?

Answer 9

2,512 square feet. Chapter 3, “Analyzing the Improvements”: 32’ x 41.5’ x 2 stories = 2,656. Subtracting 144 square feet (12’ x 12’) from 2,656 equals 2,512 square feet.

Question 10

An appraiser moves his business from Arizona to Minnesota. What characteristic will she undoubtedly notice regarding the homes in Minnesota?

Answer 10

they will have steeper roof pitches

Question 11

An appraiser notes that there is a projected increase in production by major employers, which will result in a large increase in area employment. Which of the following conclusions is MOST TRUE?

Answer 11

An increase in demand will likely precede an increase in supply.

Question 12

An appraiser’s exterior measurement of a single story residential property indicates a GLA of 1,300 square feet. An interior inspection reveals an entry foyer of 370 square feet and an eight foot by ten foot unfinished storage area not accessible from the interior of the house. The GLA of the home is:

Answer 12

1,220 square feet. Chapter 3, “Analyzing the Improvements”: This is a single story home, so there is no second floor from which we would subtract the 370 foot foyer. We would subtract the 8’ x 10’ storage inaccessible storage area, so 1,300 less 80 equals 1220 square feet.

Question 13

An investor wants to construct a four-unit apartment building. She engages an appraiser to analyze the market and tell her if the market “needs” such a building, and if the building will be worth what it costs to construct. What type of analysis is this?

Answer 13

feasibility analysis. Chapter 3, “Levels of Analysis”: A feasibility analysis will relate to the client whether the market considers such a project worthwhile – that is, whether or not the market “needs” this particular project. There must be a financial benefit from this project for it to be feasible.

Question 14

Another term for platform framing is:

Answer 14

western framing. Chapter 3, “Analyzing the Improvements”: Most of the framing allowed by building codes is of the western framing technique. This type of framing is used to construct one story at a time and is commonly called platform framing.

Question 15

Due to its durability, what type of siding is being used instead of vinyl siding on many new homes?

Answer 15

composite siding

Question 16

Generally, a heating system should be able to maintain an interior temperature of ______ degrees Fahrenheit.

Answer 16

70

Question 17

Generally, an air conditioning system should be able to maintain an interior temperature of ______ degrees Fahrenheit.

Answer 17

78

Question 18

If a home has central air conditioning, what would be the minimum electrical amperage an appraiser would expect to see in the home?

Answer 18

150-200

Question 19

If you are appraising in a stable market:

Answer 19

market conditions adjustments may not be necessary

Question 20

In analyzing the segmented market area, an appraiser might utilize:

Answer 20

list-to-sale ratios, absorption rates, expiration ratios

Question 21

In most appraisal situations, what is the appraiser’s best source for data about the subject property’s physical characteristics?

Answer 21

visual inspection of the subject property

Question 22

One of the problems in appraising high-value homes is:

Answer 22

Many of these homes are custom built for their current owners, and may not match the needs and desires of buyers.

Question 23

The age of a structure based on the condition and utility of the structure in relation to the marketplace is its:

Answer 23

effective age

Question 24

The ANSI standard for measuring residential square footage in homes is based on _________ measurements, for detached dwellings.

Answer 24

exterior

Question 25

The length of time a given structure will contribute value to the property is its:

Answer 25

total economic life

Question 26

There is a significant oversupply of high-value homes on the market in Community A, and demand for these homes has not increased. Which statements are TRUE

Answer 26

The value of high-value homes will decline.This will likely create a buyer’s market for high-value homes.

Question 27

What does a real estate investor expect in return for tying his or her money up in an investment property?

Answer 27

an acceptable rate of return

Question 28

What entity produces flood hazard maps and assigns flood area designations?

Answer 28

FEMA

Question 29

What helps an appraiser determine the appropriate level of analysis to employ in an appraisal assignment?

Answer 29

communiciation with the client

Question 30

What is an appraiser’s responsibility in determining whether the home’s footings are at least one foot below the frost line?

Answer 30

assume the home was inspected at the time it was built

Question 31

What is the first step in the market analysis process?

Answer 31

defining the market segment. Chapter 3, “Market Identification”: Defining the market segment is the first step in the market analysis process. To define the market segment is to allow the appraiser to concentrate on the individual data required for the analysis of the submarket of concern for the assignment. Market identification involves subdividing the larger market into a workable study area.

Question 32

What is the most common type of market study that appraisers are asked to complete?

Answer 32

feasibility analysis

Question 33

What is typically used to prevent back flow of sewer gasses into homes?

Answer 33

“p-traps”

Question 34

What type of analysis consists of primary economic research by an analyst?

Answer 34

fundamental analysis

Question 35

What type of analysis is developed by an appraiser using secondary data about current and past market trends?

Answer 35

inferred analysis. Chapter 3, “Levels of Analysis”: According to Market Analysis for Valuation Appraisals, inferred analysis is principally performed using the studies and surveys of others (secondary data), while fundamental analysis relies primarily on the appraiser’s own data searches and surveys (primary data).

Question 36

What type of new home is MOST likely to have a pier and beam foundation?

Answer 36

a manufactured home

Question 37

What would be an appraiser’s concern in analyzing the market for a high-value residential property?

Answer 37

How many buyers can afford to purchase this property in this location?

Question 38

What zones are designated as Special Flood Hazard Areas (SFHAs)?

Answer 38

A and V only. Chapter 3, “Analyzing Off-Site Improvements”: SFHAs are those zones designated by FEMA as “A” and “V”. Zones designated as “B”, “C”, or “X” are not included in the SFHA category.

Question 39

When a client asks for a feasibility analysis, what do they want to know?

Answer 39

whether a proposed project is feasible for the market place at this time

Question 40

When analyzing a market for a high-value home, what is the MOST important consideration?

Answer 40

the number of acceptable and qualified buyers in the market for this type of property

Question 41

When analyzing a market, an appraiser notes that there is a projected increase in production by major employers, which will result in an increase in employment. Which of the following conclusions is MOST TRUE?

Answer 41

An increase in the supply of housing is necessary.

Question 42

When there is an open two-story foyer area, the ANSI standard for measuring residential square footage requires that this open second floor area:

Answer 42

be subtracted from the square footage totals. Chapter 3, “Analyzing the Improvements”: ANSI has attempted to consolidate the measurement process into a set of guidelines for the many different entities that use finished square footage as a measurement of value. If there is an entry area and there is no flooring at the second story level, that space without a floor must be subtracted from the second story living area.

Question 43

Which are appropriate segmentation for a market analysis?

Answer 43

Residential - single family - townhouse, Residential - multifamily - 2-4 units, Commercial - office - single story

Question 44

Which of these would generally be considered examples of functional obsolescence?

Answer 44

four bedroom home with only one bathroom, older, outdated lighting and plumbing fixtures, walk-through (captive) bedrooms

Question 45

Which statement is TRUE regarding market identification?

Answer 45

The market may be subdivided more than once in order to arrive at an appropriate segmentation.

Question 46

Which statement is TRUE regarding the scope of work decision in an appraisal assignment?

Answer 46

It is the sole responsibility of the appraiser.

Question 47

Who determines the appropriate level of analysis for appraisal assignment?

Answer 47

the appraiser

Question 48

Who is responsible for making an appropriate scope of work decision in an appraisal assignment?

Answer 48

the appraiser only

Question 49

Market identification involves:

Answer 49

subdividing the larger market into a workable study area. Chapter 3, “Market Identification”: Defining the market segment is the first step in the market analysis process. To define the market segment is to allow the appraiser to concentrate on the individual data required for the analysis of the submarket of concern for the assignment. Market identification involves subdividing the larger market into a workable study area.

Question 50

Which would NOT be an appropriate segmentation for a market analysis?

Answer 50

Residential - retail - restaurant