CRU Market Analysis & Trends 2

Question 1

Which indicator best reflects short-term supply pressure in a residential market?

Accepted Answer

Months of housing supply

Answer

Months of housing supply measures how long it would take to sell current inventory at the prevailing sales pace, directly reflecting supply pressure.

Question 2

A neighborhood where 40% of sales are REO properties would most likely be classified as a:

Accepted Answer

Distressed market

Answer

High concentrations of REO (bank-owned) sales indicate widespread distress, and appraisers must identify this condition in their market analysis.

Question 3

When analyzing absorption rate, an underwriter is primarily measuring:

Accepted Answer

How quickly listed homes are selling

Answer

Absorption rate measures the rate at which available homes are sold during a given time period, indicating market velocity.

Question 4

In a rapidly appreciating market, an underwriter should be most concerned about which appraisal risk?

Accepted Answer

Comparables that lag actual market conditions

Answer

In fast-moving markets, recently closed sales used as comparables may not capture current price levels, leading appraisals to understate value or create time-adjustment disputes.

Question 5

Which of the following best describes a 'buyer's market' condition relevant to CRU underwriting?

Accepted Answer

Inventory exceeds 6 months supply

Answer

A buyer's market is generally defined by inventory levels above 6 months, giving buyers negotiating leverage and indicating downward price pressure.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU Market Analysis & Trends 2