Quiz 15 The Real Estate Market Flashcards Preview

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Flashcards in Quiz 15 The Real Estate Market Deck (11)
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1
Q
A builder is looking to develop an area of several acres. Concrete in the area is hard to get due to a large complex being built down the street. He is being affected by
A) workmanship.
B) demand.
C) pricing.
D) supply.
A

D) supply.

Items such as lumber, drywall, cement, and roofing materials are essential to builders. These must be available at a reasonable price within a reasonable time. Without a supply of materials, construction will slow and stop.

1
Q

The MOST important understanding of the vacancy rate is

A) to indicate how much money the owner will receive.
B) to indicate how much movement there is in the market.
C) to indicate the location of the property.
D) to indicate there are good neighbors in the complex.

A

B) to indicate how much movement there is in the market.

The vacancy rate (unoccupied property) is a major indicator of the rental market. A normally accepted vacancy rate is about 5-7% which indicates that there is movement and that the prices are appropriate to the market. A higher rate such as 50% means that renters are not able to rent, the price is too high, or there is little movement in the market.

2
Q
Demand may be influenced by
A) the ability of a buyer to get a loan.
B) skilled labor.
C) credit scores.
D) the ability of a builder to get a loan.
A

A) the ability of a buyer to get a loan.

The availability of mortgage credit affects demand. Even the most dedicated home buyer cannot buy if there is no money to be borrowed.

3
Q
Which of the following is NOT a demand factor?
A) Price of real estate
B) Availability of skilled workers
C) Availability of mortgage credit
D) Income of consumers
A

B) Availability of skilled workers

Availability of skilled workers is a supply, not a demand factor.

4
Q

A seller’s market occurs when
A) too many homes are for sale.
B) buyers have lots of choices.
C) not enough inventory is available for buyers.
D) sellers price their homes for over the price that they purchased.

A

C) not enough inventory is available for buyers.

When there are too many buyers and too little property, the market is said to be a seller’s market.

5
Q

The principle of property being nonhomogeneous means
A) all property must pay taxes.
B) all property is similar.
C) no two properties are the same.
D) no two properties can be owned at the same time.

A

C) no two properties are the same.

No two pieces are exactly alike. They are nonhomogeneous, which means all properties are unique, from the legal description to the bundle of rights.

6
Q
A large factory closed in the area. Many workers lost their jobs as a result. This will probably result in a
A) buyer's market.
B) seller's market.
C) lender's market.
D) renter's market.
A

A) buyer’s market.

When workers lose their jobs, they must often move and may be forced to rent rather than purchase another home. When there are too many homes and not as many buyers, it is said to be a buyer’s market.

7
Q
Government interference influences the real estate market. Which is NOT government interference?
A) Zoning
B) Building codes
C) Taxes
D) Deeds
A

D) Deeds

Government controls in real property include zoning, building codes, and taxation.

8
Q
Karen has always wanted a home near the ocean. She recently received an inheritance that would help her purchase the house she's always wanted down the street. This is an example of
A) supply.
B) financial stability.
C) demand.
D) availability.
A

C) demand.

Demand is the desire to purchase the amount and type of real estate that is for sale or for rent within a certain price range.

9
Q

Key indicators of a change in the market could be
A) a change in the sales volume.
B) more real estate salespeople coming into the business.
C) fewer real estate salespeople coming into the business.
D) predictions of harsh weather in the north.

A

A) a change in the sales volume.

How much property has sold in the last month and at what price is a key indicator of how the market is functioning.

10
Q
Real estate investment can be considered to be
A) a quick way to make money.
B) a relatively long-term investment.
C) a short-term opportunity.
D) independent of market conditions.
A

B) a relatively long-term investment.

Real estate investment tends to be a long-term investment.