RAA Real Estate Market 5

Question 1

Which market area boundary determination method relies on analyzing where buyers of a subject property actually originate from?

Accepted Answer

Buyer origin analysis

Answer

Buyer origin analysis identifies the competitive market area by plotting where actual purchasers came from when buying properties similar to the subject.

Question 2

An appraiser observes that 30% of homes in a neighborhood are vacant or boarded up. This most likely indicates:

Accepted Answer

Economic decline and potential negative externalities affecting values

Answer

High vacancy rates with boarded-up properties signal economic distress, reduced maintenance, and negative externalities that typically depress surrounding property values.

Question 3

In the context of residential market analysis, 'concessions' most commonly refer to:

Accepted Answer

Seller-paid closing costs or price reductions to complete a sale

Answer

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.

Question 4

Which demographic factor is MOST directly linked to long-term housing demand projections?

Accepted Answer

Household formation rates

Answer

Household formation rates, driven by population growth and demographic trends, are the primary long-term driver of housing demand.

Question 5

A market area with significant new construction activity and simultaneously rising vacancy rates is showing signs of:

Accepted Answer

Overbuilding relative to demand

Answer

When new construction continues despite rising vacancies, the market is being overbuilt — supply is growing faster than demand can absorb it.

(RAA) Certified Residential Accredited Appraiser Practice Test

(RAA) Certified Residential Accredited Appraiser Practice Test

RAA Real Estate Market 5