Real Estate Market Flashcards
7 cards from real RAA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Real Estate Market flashcards as text
Which market area boundary determination method relies on analyzing where buyers of a subject property actually originate from?
Answer: Buyer origin analysis
Buyer origin analysis identifies the competitive market area by plotting where actual purchasers came from when buying properties similar to the subject.
An appraiser observes that 30% of homes in a neighborhood are vacant or boarded up. This most likely indicates:
Answer: Economic decline and potential negative externalities affecting values
High vacancy rates with boarded-up properties signal economic distress, reduced maintenance, and negative externalities that typically depress surrounding property values.
In the context of residential market analysis, 'concessions' most commonly refer to:
Answer: Seller-paid closing costs or price reductions to complete a sale
Concessions are financial incentives sellers offer, such as paying buyer closing costs or price reductions, which must be identified and adjusted for in comparable sales analysis.
Which demographic factor is MOST directly linked to long-term housing demand projections?
Answer: Household formation rates
Household formation rates, driven by population growth and demographic trends, are the primary long-term driver of housing demand.
A market area with significant new construction activity and simultaneously rising vacancy rates is showing signs of:
Answer: Overbuilding relative to demand
When new construction continues despite rising vacancies, the market is being overbuilt — supply is growing faster than demand can absorb it.
The concept of 'highest and best use as if vacant' is important to market analysis because it:
Answer: Identifies the most productive use that maximizes land value
Highest and best use as if vacant determines what use would maximize the value of the land, forming the basis for land valuation and improved property analysis.
Which statistical measure is MOST useful when analyzing market price trends to minimize the effect of outlier sales?
Answer: Median price
The median price is preferred over the mean for trend analysis because it is resistant to distortion by extreme outlier sales at the high or low end of the market.