RPA Market Analysis & Economic Influences 3

Question 1

Economic base theory in real estate analysis identifies 'basic' industries as those that:

Accepted Answer

Export goods or services and bring income into the local economy

Answer

Basic industries export goods or services outside the local economy, bringing new money in and driving demand for real estate.

Question 2

A declining employment base in a community would most likely cause real estate values to:

Accepted Answer

Decrease due to reduced demand and purchasing power

Answer

Declining employment reduces household income and purchasing power, diminishing demand for real estate and driving down values.

Question 3

The multiplier effect in economic base analysis refers to:

Accepted Answer

Additional non-basic jobs created in the local economy to support basic industry workers

Answer

The multiplier effect describes how each basic industry job supports multiple non-basic (service sector) jobs in the local economy.

Question 4

Demographic data most useful to a real estate appraiser conducting market analysis includes:

Accepted Answer

Age distribution, household formation rates, and migration patterns

Answer

Age distribution, household formation rates, and migration patterns directly influence local housing demand and property types needed.

Question 5

Which indicator would an appraiser most likely examine to assess near-term demand for new residential housing?

Accepted Answer

Building permit issuance trends

Answer

Building permit trends reflect developers' and builders' expectations about near-term demand and planned future supply additions.

(RPA) Real Property Appraiser Certification Practice Test