Real Estate
Why is real estate value expected to differ across cities?
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 | Real estate is immobile and reflects local economic fundamentals |
 | Real estate has different property tax rates across cities |
| Real estate depreciates faster in some cities |
| Real estate markets are perfectly competitive |
Which of the following is best described as a supply-side shock in the housing market?
| A change in land use regulations that allow for denser housing developmemt |
| A new company headquarter opening |
| An increase in population |
| A tech boom increasing local wages |
Which of the following statements is not true?
| An increase in low-income population leads to lower prices |
| An increase in housing demand leads to higher prices, holding supply constant |
| The demand curve slopes downward, and the supply curve slopes upward |
| An increase in housing supply leads to lower prices, holding demand constant |
Question 4Correct on previous attempt(s) | 1 / 1 point |
Which of the following factors would push up housing prices in a city through the demand channel?
| Better job opportunities and higher wages |
| An increase in crime rates |
| Population outflows |
| A decline in construction costs |
Question 5Correct on previous attempt(s) | 1 / 1 point |
Less elastic housing supply means
| Prices fall faster when demand increases |
| Prices remain stable when demand increases |
| Prices rise more when demand increases |
| Supply responds more to demand |
Question 6Correct on previous attempt(s) | 1 / 1 point |
Consider two housing markets that both experience the same increase in housing demand. In Market A, housing supply is highly elastic (builders can easily add new homes). In Market B, supply is inelastic (builders are less responsive to price increases). Which market will see the larger increase in housing prices?
| Market B |
| Both markets experience the same price changes |
| There is not enough information to decide |
| Market A |
Question 7Correct on previous attempt(s) | 1 / 1 point |
A bid-rent curve shows
| The actual market rent paid at each location |
| The cost of construction at each distance |
| The maximum rent a land user is willing to pay at each distance from the city center |
| The number of firms or households at each distance |
Question 8Correct on previous attempt(s) | 1 / 1 point |
Why does a bid-rent curve slope downward with distance from the city center?
| Transportation costs increase with distance |
| Demand for land increases with distance |
| Housing supply becomes more elastic |
| Land becomes more abundant farther from the center |
Question 9Correct on previous attempt(s) | 1 / 1 point |
The bid-rent curve model says firms and households must be indifferent across locations in equilibrium, and they make tradeoff between rent and transportation cost
| True | |
| False |
Question 10Correct on previous attempt(s) | 1 / 1 point |
Question 11Correct on previous attempt(s) | 1 / 1 point |
Using the information from the last question, suppose both Alice and Ben can work from home 8 days each month. How would this change the steepness of their bid-rent curves compared to their original bid-rent curves?
| Both become steeper |
| Alice's curve becomes flatter, Ben's curve becomes steeper |
| Remain the same |
| Both become flatter |
Question 12Correct on previous attempt(s) | 1 / 1 point |
A steeper bid-rent curve indicates
| More elastic demand |
| Higher transportation/commuting costs |
| Lower transportation/commuting costs |
| Higher wages or revenues |
Question 13Retaken | 1 / 1 point |
Question 14Correct on previous attempt(s) | 1 / 1 point |
Continue with the same example from the last question. Suppose a new highway system is built, and it leads to a reduction in the transportation cost per mile for both growers. How does this change affect the bid-rent curves of the apple and orange growers?
| Apple's curve becomes steeper, Orange's curve becomes flatter |
| Both curves become steeper |
| Apple's curve becomes flatter, Orange's curve becomes steeper |
| Both curves become flatter |
What is primarily measured by the House Price Index (HPI)?
| Changes in individual homeowner prefrences |
| Fluctuations in national economic conditions |
| Trends in housing prices over time |
| Variations in property construction costs |
Which of the following best describes the key idea that underlies the repeat-sale price model to construct HPIs?
| Automatically adjust for physical quality differences over time by analyzing the same property when it sells multiple times |
| Make adjustments based on market conditions and inflation rates over consecutive sales |
| Capture changes due to non-property factors such as economic climate or neighborhood developments |
| Incorporate a variety of factors like bedrooms and bathrooms to estimate property prices |
Question 6Retaken | 1 / 1 point |
The core idea of a hedonic model is to
| Decompose prices into implicit values of attributes |
| Eliminate measure error |
| Track the same house over tme |
| Statistically measure prices accurately |
Question 7Retaken | 1 / 1 point |
Which is a key limitation of the hedonic price model?
| Omitted variable bias from unmeasured characteristics |
| Requires properties to sell at least twice |
| Cannot use all available sales data |
| Too simple to capture market dynamics |
Question 8Retaken | 1 / 1 point |
When using the sales comparison approach to value a property, an appraiser generally makes transactional adjustments first, and then property adjustments.
| True | |
| False |
Question 9Correct on previous attempt(s) | 1 / 1 point |
You are appraising the current value of a single-family residence located in Peachtree City built in 1980. Which approach would be most appropriate?
| Cost approach |
| Any of the above would produce the same estimates |
| Sales comparison approach |
| Income approach |
Question 10Retaken | 1 / 1 point |
Under the Cost Approach to appraisal, the estimated expenditure required to construct a building with equal utility as the one being appraised is termed the ______.
| Replacement cost |
| Market-adjusted normal sale price |
| Normal sale price |
| Reproduction cost |
Question 11Retaken | 1 / 1 point |
When using the sales comparison approach, how should you determine the value of the subject property?
| Use the most recent and similar comparable sale to the subject property without making adjustments |
| Select the highest adjusted sale price among the comparables to reflect market optimism |
| Make adjustments to each comparable sale and then compute their (weighted) average as the subject property's value |
| Make adjustments directly to the subject property and calculate its value |
Question 12Correct on previous attempt(s) | 1 / 1 point |
What are the general rules for selecting comparable sales when using the sales comparison approach to appraise property values? Select all that apply.
 | Choose recent sales of properties that are considered as close substitutes to the subject property |
| Choose recent sales that are under normal and fairly negotiated sales conditions |
 | Choose recent sales that have the same tax assessment values to the subject property |
| Choose recent sales that can minimize the number of adjustments |