CRM Market Analysis & Trends 3

Question 1

A property manager tracks the 'months of supply' metric for a local rental market. A reading of 2 months indicates:

Accepted Answer

A tight market favoring landlords with upward rent pressure

Answer

Two months of supply indicates very low inventory, a strong seller's/landlord's market with upward pressure on rents.

Question 2

Which cap rate movement indicates that a residential rental market is becoming more competitive and values are increasing?

Accepted Answer

Cap rates compressing (declining)

Answer

Cap rate compression means investors accept lower yields, reflecting higher property values and strong market confidence.

Question 3

A CRM candidate is analyzing a submarket where new multifamily permits have surged 40% year-over-year. What near-term market impact should be anticipated?

Accepted Answer

Potential future vacancy increases as new supply enters the market

Answer

A surge in permits signals future supply additions that, once delivered, can increase vacancy rates and pressure rents downward.

Question 4

Which of the following best describes 'rent-to-income ratio' and its relevance to residential market analysis?

Accepted Answer

The portion of a household's income spent on rent, used to gauge affordability

Answer

Rent-to-income ratio measures housing affordability at the household level, typically considered sustainable at or below 30% of gross income.

Question 5

When a residential market enters a recessionary phase, which asset class typically demonstrates the most resilience in occupancy rates?

Accepted Answer

Workforce housing (Class B/C)

Answer

Workforce housing tends to be more resilient in recessions because tenants trade down from luxury and homeownership, maintaining demand.

(CRM) Certified Residential Manager Practice Test

(CRM) Certified Residential Manager Practice Test

CRM Market Analysis & Trends 3