Real Estate Investing Real Estate Market Cycles 2

Question 1

Which economic indicator is most closely watched as a leading indicator of real estate market expansion?

Accepted Answer

Housing starts data

Answer

Consumer Price Index (CPI)

Answer

Federal Funds Rate changes

Answer

Trade deficit figures

Question 2

During the 'hypersupply' phase of a real estate cycle, what typically happens to vacancy rates?

Accepted Answer

Vacancy rates rise above the long-term average

Answer

Vacancy rates fall sharply

Answer

Vacancy rates remain flat

Answer

Vacancy rates drop to zero

Question 3

A real estate investor who purchases properties during the recession phase of a market cycle is employing which strategy?

Accepted Answer

Contrarian investing

Answer

Momentum investing

Answer

Income investing

Answer

Index investing

Question 4

Which of the following best describes 'absorption rate' in real estate?

Accepted Answer

The pace at which available properties are sold or leased in a market

Answer

The rate at which landlords absorb operating costs

Answer

The percentage of mortgage interest absorbed by tax deductions

Answer

The rate of property value depreciation

Question 5

When the 10-year Treasury yield rises significantly, what is the typical short-term effect on cap rates?

Accepted Answer

Cap rates tend to expand upward

Answer

Cap rates compress immediately

Answer

Cap rates remain unchanged

Answer

Cap rates move inversely to bond yields

Question 6

In Mueller's four-phase real estate cycle model, what phase follows 'recovery'?

Accepted Answer

Expansion

Answer

Recession

Answer

Hypersupply

Answer

Contraction

Question 7

A market with a months-of-supply figure below 3 months is generally characterized as:

Accepted Answer

A seller's market

Answer

A balanced market

Answer

A buyer's market

Answer

A recessionary market