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Real Estate Economics
Residential Market Analysis and Highest and Best Use
Terms in this set (312)
a place where goods and services are exchanged.
"A series of conditions that facilitates the bringing together of buyers and sellers. In a particular market, there is a free exchange of the product. Some markets, like the stock market, are regional and national. The market for real estate tends to be local."
A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises."
The geographic region from which a majority of demand comes and in which the majority of competition is located. Depending on the market, a market area may be further subdivided into components such as primary, secondary, and tertiary market areas, or the competitive market area may be distinguished from the general market area.
A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural.
A study of the market as a whole, as well as the investigation of conditions of a component of that market, for a particular type of property, is the definition of:
USPAP states that credible assignment results require _________.
Before the advent of the Internet, appraisers were frequently hampered by:
lack of Reliable Local Market Data
When an appraiser is analyzing the subject property's market area, which question is LEAST likely to be asked?
Who owns the property?
The appraisal profession has its own fundamental terminology, just like the medical and legal professions.
Today, if an appraiser has an "oddball" appraisal assignment and there is no local data, the appraiser can:
use the Internet to research data or contact other appraisers for data
Most appraisal assignments require an opinion of:
A place where goods and services are exchanges is the definition of a
Before the advent of the internet, apprisers were frequently hampered by:
Lack of reliable local market data
The appraisal profession has its own fundamental terminology, just like the medical and legal professions.
When an appraiser is analyzing the subject property's market area, which question is MOST likely to be asked?
What defines the boundaries of the subject property's neighborhood?
Some of the other perceived benefits derived from income producing properties may include:
Projected income to be received;
Using the property as a tax shelter;
Probable appreciation of the asset; and
Use of the property for a personal business.
The principle of balance is closely related to the following principles:
Four agents of production
Which of these would NOT be an example of the principle of externalities?
an in ground pool on the subject property
Nothing ever remains stable or in balanced, as evidenced by the:
Principle of change
When supply is higher than demand the value of a product
If a property is over improved or under improved
the four agents of production are out of balance
What are the four agents of production
land, labor, capital, and coordination
Perceived benefits from the ownership of income-producing property would include all of the following except
Which of these would be an external factor that could affect that value of a single-single home
all of these
When supply and demand are in balance in a market this produces
The value of a single family home is decreased when a large industrial plant is constructed directly across the street. What economic principle does this best demonstrate
The principle of contribution is most closely associated with:
the sales comparison approach
Which economic principle relates to the advantages of an alternate investment
If there are not enough homes available in a market to satisfy demand, what will happen to home proces
they will increase
When analyzing the life cycle for a neighborhood, which stage is characterized by equilibrium of supply an demand
Which stage of the life cycle does not happen in every neighborhood or property?
When analyzing the life cycle for a neighborhood, which stage is characterized by a strong demand and rising values?
If there are not enough homes available in a market to satisfy demand, this is known as __________.
If two substantially similar homes are offered for sale in a neighborhood at the same time, which one will sell first?
the one with the lower price
The principle of surplus productivity states that after paying the costs of the first three agents of production, any residual income is attributed to ________.
Which of these is an example of the principle of progression?
Fair quality home in a neighborhood of good quality homes
An investor is looking at two properties, but will only purchase one of them. Each is similar in utility and location, and has an annual net operating income of $20,000. One has a listing price of $220,000, while the other is listed at $200,000. The investor purchases the $200,000 property. Which economic principle is demonstrated in this example?
Most real property appraisal assignments are intended to develop an opinion of:
When insuring a property, what is the cost of producing a functional equivalent of the insured improvement, using modern materials and techniques?
Why does insurance value typically not include the value for the land?
land typically cannot be destroyed
The market value of a property is $200,000 and the loan-to-value ratio is 75%. What is the loan value for this property?
What type of value is based on a specific investor's needs and desires?
The market value of a property is $255,000 and the loan-to-value ratio is 70%. What is the loan value for this property?
A single-family home is situated in a growing commercial area. The highest and best use is to raze the home and construct a commercial building. A client asks an appraiser to value the property as a single-family home, and not under its highest and best use as a commercial site. What type of value is this client asking for?
value in use
The amount of money that a financial institution is willing to lend the borrower on a particular property is the:
What type of value recognizes the cost to replace the improvements but does not include the land value?
What does USPAP say about market value
appraisers are cautioned to identify the exact definition of market value and its authority
What type of value is generally considered equivalent to market value?
value in exchange
How is the type of value used in an appraisal assignment determined?
the appraiser identifies the type of value, based on the intended use of the appraisal
Which statement is TRUE about property purchase loans and down payments?
The greater the down payment, the less chance the borrower will default.
Assessed value is also known as:
ad valorem value
When insuring a property, what is the cost of producing an exact replica of the insured improvement?
The definition of market value included in USPAP Advisory Opinion 22:
is only an example
What type of value includes an operating business with both tangible and intangible assets?
going concern value
In relation to real property, the term SLUGER refers to:
bundle of rights
With regard to the four forces that create value, what is meant by effective purchasing power?
the ability of market participants to purchase a property
When a property is leased, what is the tenant's interest called?
A change in local employment and income levels would be considered a(n) ___________ force affecting values.
Which are the four forces that create value?
Utility, Scarcity, Desire, Effective Purchasing Power
With regard to the four forces that create value, what is meant by utility?
a property must have usefulness in order to have value
A change in a community's zoning ordinance would be considered a(n) ___________ force affecting values.
Governmental restrictions on use of land include:
eminent domain, taxation, and escheat
The right of the government to take private property, for public good, with just compensation is:
what does ownership in severalty mean
one person owns the property
The principle of surplus productivity is associated with which approach to value?
One of the characteristics of land Heterogeneity. What does this mean?
each piece of and is unique
The principle of substitution is associated with which approach(es) to value?
Both the Sales Comparison and Cost approaches
What is another name for the principle of inclining and declining periods?
Integration and Disintegration
A property owner constructs a six-car garage at a cost of $80,000. It only adds $40,000 in value to the property. What economic principle does this best demonstrate?
The fact that a property's value may be different next week than it is today demonstrates what economic principle?
The value of a good quality home will suffer if it is located in a neighborhood of average or fair quality homes. What economic principle does this demonstrate?
What are the four stages of a property's life cycle
growth, stability, decline, renewal
In a typical subdivision, who is responsible for enforcing the deed covenants?
the homeowners association
A change in typical family size in a market would be considered a(n) ___________ force affecting values.
If a property has significant liens or clouds on the title, and the owner is unable to sell it because of these issues, the property can be said to lack ___________.
An appraiser must value the land and the improvements based on the same use. Which economic principle or theory does this demonstrate?
Which of these would NOT be an example of general data?
The dimensions of the subject property's site would be considered what type of data?
The subject property's assessment record would be considered ________ data.
What type of data would pertain to a specific property being appraised?
The comparable sales used in an appraisal assignment are considered ______ data.
Data that has already been compiled and is deemed to be reliable is:
secondary data source
Most specific data are gathered from a:
primary data source
What type of data would pertain to trends in the local market area?
Examples of general data include all of the following EXCEPT:
In the purchase of a residential property, how does the principle of anticipation apply to the buyer's actions?
buyer typically anticipates the value of the property will increase
Market analysis in appraisals can be divided into ___ distinct categories.
In a market that has maintained a state of equilibrium, what would an appraiser expect to see?
home prices remain stable
In most markets:
demand changes faster than supply
When writing an appraisal report, charts and graphs may be used to replace parts of the narrative explanation.
Questions about balance must be answered by the appraiser in order to:
measure the trends of the market area
In a "seller's market", an appraiser is most likely to find:
a small number of properties available
In determining market supply and demand, questions to be considered by the appraiser would include all of the following EXCEPT:
What is the physical condition of the subject property?
In a "seller's market", an appraiser is likely to find:
increasing property values
What is the likely result of an announcement of the closing of an industrial plant that is a region's major employer?
decreasing property values
Which period in a neighborhood's life cycle will mean a demand for more social services to be supplied by the community?
A neighborhood in the decline phase of its life cycle will usually be characterized by a decline in:
both of these
How might an appraiser determine if a neighborhood is in the decline phase of its life cycle?
analyze the ratio of owner occupied-properties to tenant-occupied properties
There were 24 sales in a subdivision in the last year, and there are currently 10 properties on the market. What is the monthly absorption rate?
2 per month
In a market area, there were 327 single-family sales last year, and there were 29 expired listings that did not sell. What is the expiration ratio for this area?
In a neighborhood, there were 122 single-family sales last year, and there were 52 expired listings that did not sell. What is the expiration ratio for this area?
What is another name for "average"?
What is the preferred method of estimating site value for residential properties?
Sales Comparison method
Which of these is NOT an accepted method of estimating site value?
surrogate method S
The revitalization period of a neighborhood's life cycle is also called
market study is the analysis of the circumstances surrounding typical buyers versus sellers and investors versus tenants in a particular area. Market studies are not property specific, but can relate to a predominant type of property in a given area.
is the analysis of a specific property type in a defined area and involves rate differentials measuring the absorption rates for a particular type of property in a given area.
What does USPAP state about cost
it is a fact, or an estimate of fact
When appraising in a "seller's market", an appraiser is most likely to make adjustments for:
An announcement of the closing of an industrial plant that is the region's major employer would likely result in
a buyer's market
In a market area, there were 168 single-family sales last year, and there are currently 98 properties on the market. What is the monthly absorption rate?
14 per month
In order to produce credible assignment results, an appraiser should:
verify all data
Data that is gathered personally by the appraiser is:
During which period in a neighborhood's life cycle will there be a strong demand for additional community infrastructure?
When writing an appraisal report, _________ may be used to replace parts of the narrative explanation.
charts and graphs
There were 24 sales in a subdivision in the last year, and there are currently 10 properties on the market. How long will it take the market to absorb this existing inventory?
What would be an appraiser's concern in analyzing the market for a high-value residential property?
How many buyers can afford to purchase this property in this location?
In analyzing the segmented market area, an appraiser might utilize:
list to sale ratio, absorption rates, expiration rates (all of the above)
What is the first step in the market analysis process?
defining the market segment
Market identification involves:
subdividing the larger market into a workable study area
Which statement is TRUE regarding market identification?
The market may be subdivided more than once in order to arrive at an appropriate segmentation.
Which would NOT be an appropriate segmentation for a market analysis?
Residential - retail - restaurant
There is a significant oversupply of high-value homes on the market in Community A, and demand for these homes has not increased. Which statement is FALSE?
The value of all homes in the area will decline.
A custom-built high-quality home is currently listed for sale, and is the only high-value home on the market in its area. The current owner/builder was a single man who disliked his family; consequently he built a one-bedroom home to discourage any of his grown children from moving back in with him. Which statement is true?
Even though it is the only home for sale, if it does not meet utility requirements of buyers, it has a lower value.
An investor wants to construct a four-unit apartment building. She engages an appraiser to analyze the market and tell her if the market "needs" such a building, and if the building will be worth what it costs to construct. What type of analysis is this?
Who is responsible for making an appropriate scope of work decision in an appraisal assignment?
the appraiser only
Who determines the appropriate level of analysis for appraisal assignment?
What type of analysis consists of primary economic research by an analyst?
What helps an appraiser determine the appropriate level of analysis to employ in an appraisal assignment?
communication with the client
Inferred Analysis: This type of analysis is used by the appraiser to project the demand for properties based on current market trends. Inferred analysis is defined in The Dictionary of Real Estate Appraisal, Sixth Edition as "A prediction of future market conditions based on inferences drawn from general market information, published data, and historical trends in rents and absorption rates and occupancy for similar property types."
Fundamental Analysis: This is defined in The Dictionary of Real Estate Appraisal, Sixth Edition as "A prediction of future market conditions based on comparison of a quantified estimate of future demand with a quantified estimate of future supply; also known as fundamental demand analysis."
This type of analysis examines the present worth of a future benefit. You are right if you equate that statement to the principle of anticipation. Investors want to know the market perception of an acceptable rate of return for their real estate investment. Included in this analysis will be the consideration of an appropriate holding period for the property, anticipated cash flows during the holding period, and the anticipated return when the property is sold at the end of the holding period. The frequently asked questions asked of the appraiser are:
How much should I pay for this property considering that I want a -- % return from the investment?
Is my --% return from this investment realistic?
How long should I hold on to this property to maximize my investment?
How much cash flow can I expect during the holding period?
How much can I resell the property for at the end of the holding period?
This type of analysis will relate to the client whether the market considers such a project worthwhile - that is, whether or not the market "needs" this particular project. There must be a financial benefit from this project for it to be feasible. If the cost to purchase the site and construct a four-unit building is estimated at $300,000, then the marketplace must be able to recognize that $300,000 cost, plus the developer's profit, as the minimum value for the project when completed. If that is the market reaction to the construction project, then the market has determined the project is worthwhile, or financially feasible. The market has indicated a demand for the four-unit building.
Steps in the Analysis Process
survey the market
Study the market
projecting future economic growth potential
A community's total employment is 29,120. The number of total core industry employees is 18,200. If the core industry adds 450 more jobs, how many additional jobs will be generated in the community?
What is the most common type of market study that appraisers are asked to complete?
In most appraisal situations, what is the appraiser's best source for data about the subject property's physical characteristics?
visual inspection of the subject property
When a client asks for a feasibility analysis, what do they want to know?
whether a proposed project is feasible for the market place at this time
A community's total employment is 52,220. The number of total core industry employees is 37,300. For every 10 jobs added in the core industry, how many additional jobs will be generated in the community?
If a home has central air conditioning, what would be the minimum electrical amperage an appraiser would expect to see in the home?
The age of a structure based on the condition and utility of the structure in relation to the marketplace is its:
What zones are designated as Special Flood Hazard Areas (SFHAs)?
A and V only
What is an appraiser's responsibility in determining whether the home's footings are at least one foot below the frost line?
assume the home was inspected at the time it was built
An appraiser's exterior measurement of a single story residential property indicates a GLA of 1,300 square feet. An interior inspection reveals an entry foyer of 370 square feet and an eight foot by ten foot unfinished storage area not accessible from the interior of the house. The GLA of the home is:
1,220 SQ feet
Generally, an air conditioning system should be able to maintain an interior temperature of ______ degrees Fahrenheit.
Which of these would generally be considered examples of functional obsolescence?
(al of these)
four bedroom home with only one bathroom
-older, outdated lighting and plumbing fixtures
-walk through (captive) bedrooms
The ANSI standard for measuring residential square footage in homes is based on _________ measurements, for detached dwellings.
What entity produces flood hazard maps and assigns flood area designations?
A property suffers from functional obsolescence because it has four bedrooms and only one bathroom. Installation of a second bathroom would cost $10,000 and would increase the value of the property by $12,000. This functional obsolescence is:
The length of time a given structure will contribute value to the property is its:
total economic life
A property suffers from functional obsolescence because it has outdated single-pane windows. Installation of new multipane windows would cost $24,000 and would increase the value of the property by $20,000. This functional obsolescence is:
Because the increase in value due to the new windows ($20,000) is less than the cost to install the windows ($24,000), this is considered to be incurable.
What is typically used to prevent back flow of sewer gasses into homes?
Generally, a heating system should be able to maintain an interior temperature of ______ degrees Fahrenheit.
A two-story home measures 32 feet by 41.5 feet on the exterior. There is an open two-story foyer area which measures 12 feet by 12 feet. What is the gross living area (GLA) of this home?
2,512 square feet
Another term for platform framing is:
One of the problems in appraising high-value homes is:
Many of these homes are custom built for their current owners, and may not match the needs and desires of buyers.
What helps an appraiser determine the appropriate level of analysis to A two-story home measures 32 feet by 41.5 feet on the exterior. There is an open two-story foyer area which measures 12 feet by 12 feet. What is the gross living area (GLA) of this home? in an appraisal assignment?
2,512 square feet
Who determines the appropriate level of analysis for appraisal assignment?Who is responsible for making an appropriate scope of work decision in an appraisal assignment?
A community's total employment is 52,220. The number of total core industry employees is 37,300. If the core industry adds 920 more jobs, how many additional jobs will be generated in the community?
If you are appraising in a stable market:
market conditions adjustments may not be necessary
An investor wants to construct a four-unit apartment building. She engages an appraiser to analyze the market and tell her if the market "needs" such a building, and if the building will be worth what it cost to construct. What type of analysis is this?
What does a real estate investor expect in return for tying his or her money up in an investment property?
an acceptable rate of return
All appraisal assignments that require a market value opinion imply that:
the property will be valued at its highest and best use
An appraiser's highest and best use conclusion is always:
The two types of highest and best use analysis are:
as vacant and as improved
What is the reasonably probable and legal use of a property that is physically possible, appropriately supported, financially feasible, and results in the highest value?
highest and best use
The market value of the land is always determined based on:
its highest and best use
The appraiser will examine those governmental and private restrictions on the use of the land area. Is the appraiser's decision on the highest and best use permitted with the existing zoning for the property? Is there a good probability that the zoning for the property could be changed? The appraiser should inquire about historical decisions concerning zoning change requests and review the community's long range development plans. Are there private deed restrictions or land use covenants which would further limit the highest and best use of the land area? Covenants may limit the size or building height of any improvements that could be constructed on the land. Are there governmental environmental restrictions which would limit the optimum use of the land in question?
In the majority of assignments, the highest and best use of the land is not to leave it as vacant land. The appraiser must look to the allowable uses and determine the physical requirements for the use of the land or site. Is the site large enough to accommodate the appraiser's highest and best use decision? What are the zoning requirements relating to the required setbacks and the ratios between the land green areas and the building's footprint? Does the shape of the land area allow for the highest and best use per the appraiser's decision? The appraiser will determine whether the land area is conducive to development for the highest and best use. The appraiser will have to analyze the requirements for the highest and best use of the land, and further testing may be necessary for a final determination.
This consideration is also called economic feasibility. There are two interconnecting analyses required for this determination as to the highest and best use for the land.
In highest and best use analysis, how do we determine maximum productivity?
the use that results in the highest land value
Which highest and best use criterion would require an appraiser to consider the need for the land use, or how many similarly-used land areas are in the market area?
If the improvements have a negative value, an appraiser must consider __________ in the feasibility analysis.
An appraiser is analyzing a parcel of vacant land, on a back road in a rural area. The owner tells the appraiser he plans to build a fast-food restaurant on the land. There is no zoning, and no other significant land use restrictions. The appraiser determines the highest and best use is NOT to build a fast food restaurant. What is the most likely reason for this conclusion?
it is not financially feasible
Which highest and best use criterion would require an appraiser to consider private deed restrictions?
When testing for highest and best use, which criterion (or test) is applied last?
Only those uses which produce a positive return are considered _________.
Which highest and best use criterion would require an appraiser to consider the availability of public utilities to a site?
Which highest and best use criterion would require an appraiser to consider the shape of the site?
When testing for highest and best use, which two criteria (or tests) are applied first?
legally permissible and physically possiblele
Which highest and best use criterion would require an appraiser to consider what improvements would fit on the site?
Legal Nonconforming uses
A legally nonconforming use is defined in The Appraisal of Real Estate, 13th Edition, as "a use that was lawfully established and maintained, but no longer conforms to the use regulations of the current zoning in the zone where it is located."
These are properties that are best suited for a mixed-use; that is, a property containing multiple uses under the same roof. In New York City for example, there are several buildings in Manhattan which contain retail stores, service centers, restaurants, and office space, with the remainder of the building consisting of several floors of residential condominiums. In this example, the building has several different uses. The municipal zoning ordinance allows for the extended uses of the building. Some of the high-rise buildings also have parking garages for both private and public parking as parking spaces are at a premium in the heart of the city.
Special Purpose Properties
These are properties which have been improved for a very specific purpose. In other words, their improvements were constructed to serve a singular purpose. Value, or the generation of income, may not have been the primary motivation for their initial development.
Unique Properties and Larger sites
Special use properties are unique in nature and are deserving of a detailed determination for their highest and best use. We have shown that many public buildings, which have become obsolete and no longer support the purpose for their original construction, can be resurrected and enjoy a completely different use from their former special use.
Land that is larger than typical for the area, larger than what is required for the subject's use, and is capable of being sold for a separate use is:
A sports arena with restaurants and retail shops on the lower level would best be described as what type of property?
multiple use property
Who would be the most likely purchaser for a multi-use property?
A commercial use was established in 1975. The local municipality rezoned the property in 1990 to permit only residential uses. The commercial use is permitted to continue its operations. What is this?
Legally nonconforming use
A commercial building which is a legal nonconforming use in a residential neighborhood would be considered:
Land that is larger than typical for the area, but cannot be separated and used effectively and is not capable of a separate use, is:
A property has one acre, in an area where half-acre lots are common. There is a single-family home located at one end of the property, and is situated in such a way that a half-acre site could be sold off and developed without affecting the existing homesite. Which statement best describes this situation?
This is an excess land situation.
A parcel of vacant land is located in a blighted area where there is no demand for land. Which statement is TRUE?
The highest and best use may be to remain vacant.
A property has two acres, in an area where one-acre lots are common. There is a home built on the property at one corner. The property is situated in such a way that one acre could be sold off and developed without affecting the existing homesite. This would be considered ___________ situation.
an excess land
A property is currently zoned for agricultural use, but its highest and best use is expected to change to commercial use within the next 3-5 years. The subject property's current use is considered:
"A use that is lawfully established and maintained, but no longer conforms to the use regulations of the zone in which it is located" is the definition of what term?
Legally nonconforming use
A residential dwelling which is a legal nonconforming use in a commercial area would be considered:
Is an opinion of highest and best use required in an appraisal that is NOT based on market value?
No, but it still may be necessary for credible assignment results
A single-family residence is located in a commercially-zoned area. Residential sale prices in the area range from $100-110 per square foot. The residence could be converted to offices at a cost of $20 per square foot. Office space in this area is selling at $135-150 per square foot. What is the highest and best use of this property?
convert the residence into offices
Which highest and best use criterion would require an appraiser to consider minimum lot sizes and height restrictions imposed by a local municpality?
Appraisal assignments that require a market value opinion imply that:
the property will be valued at its highest and best use
A property is currently zoned for agricultural use, but its highest and best use is expected to change to commercial use within the next 3-5 years. The subject property's current use is considered
Which of these would be considered special purpose properties?
(fire station, workshop and schools) any of these
What often happens when a special purpose property, like a school, is abandoned?
it will be put to an alternative use
A vacant site is zoned for use as a single-family homesite, and it is unlikely to be changed. As a single-family homesite, the site is worth $75,000. As a commercial site, it would be worth $150,000. What is the highest and best use of this property?
A single-family homesite is worth $40,000. The owner plans to build a 4,000 square foot home on it, at a cost of $600,000. When it is completed, the property will be worth $620,000. Which statement is TRUE regarding the proposed 4,000 square foot home?
It is not financially feasible
A single-family home is situated on a commercially-zoned lot. It would not be financially feasible to convert the home to commercial use, because there is not enough demand for commercial properties at this time. However, demand is expected to increase as the community grows. Which statement is TRUE regarding this situation?
Single-family use is an interim use.
Which highest and best use criterion would require an appraiser to consider excavation or filling that may be required in order for a site to accommodate an improvement?
There were 36 sales in a subdivision in the last year, and there are currently 12 properties on the market. What is the monthly absorption rate?
_______________ Value is the price a property will sell for, if required to be sold very quickly.
Market value is generally considered equivalent to ___________________.
Value in Exchange
________________ involves subdividing the larger market into a workable study area.
The client and/or the intended users can visualize the analysis process as well as follow the thought process that was used by the appraiser by viewing _________________.
Charts and graphs
The __________ equates to a rate of return for the initial investment.
Statistical analysis of data is a mechanical means to ascertain estimates using formulas specifically designed for the compilation of ___________________.
large amounts of data
Loan Value is usually a percentage of the _______________.
appraised value or market value
________ Land is capable of a separate or alternative use.
Which is NOT a type of roof?
Part of the definition of Highest and Best Use is that it is "Legally _______________________..."
A property suffers from functional obsolescence because it lacks air conditioning. Installation of air conditioning would cost $15,000 and would increase the value of the property by $20,000. This functional obsolescence is _________________.
Which of these would be considered specific data?
Subject's site area
When the land value is subtracted from the sales price, the _______________________ is identified.
Depreciated value of the improvement
The cost of a given amenity does not guarantee the ___________ of that particular item.
A broad-based analysis involves the study of the supply and/or demand for a particular type of property or commodity within a particular service area or community. There is not a specific property or location involved in this type of analysis, which is called a ____________ Analysis.
What is the first step in a feasibility analysis?
survey the market
Employing zero lot lines and attach the garage areas between two houses is called ___________ housing.
The _________ Standard is a standardized system for measuring residential properties.
Market condition adjustments may not be found to be supportable or necessary, if the market place is ___________.
__________ Land cannot be separated.
Data that are readily available from public sources such as the local chamber of commerce, the community city hall, or the area public library is known as __________ data.
"A prediction of future market conditions based on comparison of a quantified estimate of future demand with a quantified estimate of future supply" is the definition of __________________.
The right of eminent domain may be exercised by
All of these (state government agencies, pubic service companies, and local government)
We generally say that equilibrium is achieved when ________________ for the product.
Supply is slightly more than the demand
A change in population density in a market would be considered a(n) ________________ force affecting values.
Who will ultimately determine what a given amenity will contribute to the overall property value? ________________.
Market participants (buyers and sellers)
Some investors require a higher rate of return because of a greater investment ____________________.
Which of these is an example of the principle of regression?
Good quality home in a neighborhood of fair quality homes.
Supply usually __________ the demand for a commodity or property.
Which highest and best use criterion would require an appraiser to consider the soil composition of the site?
office properties would not generally include
The most frequently occurring number of the data being analyzed is the __________.
The Consistent-Use Theory says the _______________ must all be valued considering the same highest and best use of the property
Land and the Buildings
The ability of the public to be able to purchase a commodity or property is called ______________ purchasing power.
Sites may be analyzed using all these methods EXCEPT _______________.
Price per cubic foot
In a market area, there were 132 single-family sales last year, and there are currently 77 properties on the market. How long will it take to sell this existing inventory?
Who will decide if the individual improvement is in conformance with the neighborhood or not?
A residential property is currently zoned for residential use, but its highest and best use is expected to change to Light industrial use within the next 2-4 years. The subject property's current use is considered __
Another name for Sole Ownership is _________________.
Ownership in Severalty
Some assignments require personal verification of comparable sales with a party to the transaction. These might include all of these EXCEPT ______________.
The factors of ______________ are the predominant forces to ultimately determine the value for housing in the marketplace.
Supply and demand
Market visualization of the real estate life cycles will ultimately determine the ____________ for these individual properties.
A community's long range plan is called the ____________.
Restrictions on the use of a property in this market area may have an effect on the ______________ of the property.
What type of value is actually an accounting term?
An Apartment building has rents of $800, $835, $850, $850, and $875 per month. What is the Median of the rents?
Some of the more prominent economic principles and theories are
Related to and overlap each other
The status of the ____________________ of the community will determine the market for the foreseeable future.
Major employment centers
An opinion of value can be directly related to the ________________ of the rights of ownership for the individual property.
Presence or absence
The ability to sell or transfer the property freely in the marketplace is known as ___________________.
Many communities offer ________________ to rehabilitate a declining neighborhood.
A corporation or trust that combines the capital of many investors to acquire or provide financing for all forms of real property is called a(n) __________________________.
Real Estate Investment Trust.
The appraiser must perform the necessary market analysis to obtain enough information to ___________________________.
Make the highest and best use determination for the subject property.
In a neighborhood, there were 180 single-family sales last year, and there were 60 expired listings that did not sell. What is the expiration ratio for this area?
A community's total employment is 77,700. The number of total core industry employees is 55,500. What is the base core multiplier?
A restaurant was established in 1998. The local municipality rezoned the property in 2005 to permit only residential uses. The restaurant use is permitted to continue its operations. What is this called?
Legally nonconforming use.
An investor considers building an investment property and the total cost would be $550,000. The investor expects a 15% return on his investment. For this project to be financially feasible, it would have to be worth at least __________ upon completion.
Part of the definition of Market Value is that it is the "price that a property should bring in a(n) ________________ market."
Open and competitive
A community's total employment is 58,240. The number of total core industry employees is 36,400. If the core industry adds 600 more jobs, how many additional jobs will be generated in the community?
Value in Use is based on the property's _________________.
When improvements are added, such as roads, water and sewer; then _________ becomes _____________.
Land, a site
A municipal building or a church are considered to be _______________.
Special Purpose properties.
The owner of a unit in a cooperative owns _______________.
Stock in the corporation
All _____________ appraisal assignments require an opinion of Highest and Best Use.
Data which pertain to the subject and comparable properties and also describe individual property values are called ___________ data.
All of the other items to be considered in highest and best use analysis must be satisfied first, before we can determine __________________.
_______________________ ownership is specifically for husband and wife.
Tenancy by the Entirety
All of these are external factors that could affect the value of a property EXCEPT _____________.
A backyard swimming pool
Building code enforcement falls under the category of ________________.
Going concern value includes an operating business with ______________________ assets.
Both tangible and intangible
Data that is collected by the appraiser from the market place is known as _____________ data.
Which of these designations would indicate that a property is in a Special Flood Hazard area?
When testing for legal permissibility, the first thing which should come to the appraiser's mind is the _____________.
A two-story home measures 28 feet by 48 feet on the exterior. There is an open two-story foyer area which measures 11 feet by 14 feet. What is GLA of this home?
__________ Land cannot be separated.
Part of the definition of Highest and Best Use is that it is the use that "results in the __________ value."
The special design of the particular structure, such as a church, may contribute to a ________________.
value in use
A(n) ___________________ is the analysis of a specific property type in a defined area and involves rate differentials measuring the absorption rates for a particular type of property in a given area.
The legally and physically possible use which will yield the highest probable return on value in the reasonably foreseeable future, is the_______________ Use.
Highest and best
Changes in the demand for differing housing styles or housing locations can be the cause of _____________ obsolescence.
functional or external
"A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural" defines ________.
Inflationary conditions and the cost of money would be considered to be ________________ forces.
Which principle works in conjunction with the principle of change, but quantifies the rate and character of the change involved? Inclining and Declining Periods.
Inclining and Declining Periods.
With investors, the Principle of Substitution applies to them looking for the highest __________ to be derived from a property.
The elements of nature can affect value. This is called a(n) _____________ force.
A property's value is directly related to the ___________ for that type of property.
Markets will generally fall into the following categories, EXCEPT for _______________.
In a Buyer's market, an appraiser is most likely to find____________________.
A large number of properties available
Data that describe the local market area or neighborhood of the subject property are called ___________ data.
Office properties would NOT generally include:
When appraisers survey the market during a feasibility analysis, they rely primarily on ______________.
A highest and best use opinion must be developed ____________________________.
When it is necessary for credible assignment results
In Fannie Mae's definition of value it says that it assumes a reasonable time is allowed for __________________________.
Exposure to the open market
Legally nonconforming use is "a use that was lawfully established and maintained, but no longer conforms to the use regulations of the _______________ in the zone where it is located."
The capacity of a furnace heating system is measured in _______.
You add a swimming pool to your back yard at a cost of $30,000. It only adds $10,000 in value to the property. What economic principle does this best demonstrate?
As part of data analysis, the information that is truly relevant to the assignment will then undergo ____________ and will be subjected to further testing and analysis by the appraiser.
To measure the trends of the market area, the appraiser must ask questions about ______________________.
balence, suplly, and demand (all of the above)
The principle of ______________ works in conjunction with the four agents of production and the amount of income a property can produce.
The appraiser uses _____________ data to identify trends in the marketplace.
If the individual property is one classified as a high-value property, the appraiser will identify the limited market for this type of property on the basis of the _____________ within the defined market area.
Disposable income availability
Part of the definition of Highest and Best Use is that it is "Physically _______________..."
The ________________ Cycle of a neighborhood is characterized by demand and supply trending toward equilibrium.
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