Real Estate Market Flashcards

In a buyer's market, which condition is most likely present?

Answer: High inventory with declining prices

A buyer's market is characterized by excess supply over demand, resulting in high inventory and downward pressure on prices.

The absorption rate in a local market is calculated as the number of sales divided by:

Answer: Active listings

Absorption rate equals the number of sales per period divided by active listings, expressed as a percentage or months of supply.

A market area experiencing rapid population growth and limited new construction would most likely show:

Answer: Rising property values

When demand (population growth) outpaces supply (limited construction), competitive pressure drives property values upward.

Which type of market data is considered PRIMARY data for real estate market analysis?

Answer: Field interviews with buyers and sellers

Primary data is collected firsthand by the researcher directly from the source, such as interviews with market participants.

A neighborhood transitioning from single-family residential to mixed commercial use is undergoing:

Answer: Transition

Transition refers to a neighborhood in the process of changing from one use type to another, affecting market dynamics.

Which factor would cause the demand curve for housing to shift LEFT (decrease)?

Answer: Increase in mortgage interest rates

Rising mortgage interest rates increase the cost of borrowing, reducing the number of qualified buyers and decreasing housing demand.

When analyzing a submarket, an appraiser delineates the competitive market area based primarily on:

Answer: Where properties compete for the same buyers

A competitive market area is defined by the geographic zone where properties are functionally substitutable and compete for the same pool of buyers.