Real Estate Investing Market Analysis and Economics 2

Question 1

Which economic indicator most directly signals an INCREASE in housing demand in the short term?

Accepted Answer

Falling unemployment rate

Answer

A falling unemployment rate means more people have stable incomes, increasing their ability and willingness to purchase homes.

Question 2

In real estate market analysis, 'months of supply' is calculated as:

Accepted Answer

Active listings divided by monthly closed sales

Answer

Months of supply = active listings ÷ average monthly closed sales, indicating how long it would take to sell all current inventory at the current pace.

Question 3

A neighborhood with a high 'walk score' and proximity to mass transit is most closely associated with which market trend?

Accepted Answer

18-hour city growth

Answer

18-hour cities are mid-size metros offering urban amenities like walkability and transit that attract residents seeking alternatives to expensive gateway cities.

Question 4

What does a negative net migration figure in a metro area suggest for local real estate investors?

Accepted Answer

Potential softening of rents and home values

Answer

Negative net migration means more people are leaving than arriving, reducing housing demand and putting downward pressure on rents and prices.

Question 5

Which phase of the real estate cycle is characterized by rising rents, low vacancy, and increasing new construction starts?

Accepted Answer

Expansion

Answer

The expansion phase features strong demand outpacing supply, driving rents up and vacancy down, which incentivizes developers to start new construction.

Real Estate Investing Practice Test

Real Estate Investing Practice Test

Real Estate Investing Market Analysis and Economics 2