Basic Appraisal Principles Ch 16:
Market Analysis Exam Questions and
Answers 100% Pass
Market Analysis - ✔✔A process for examining the demand for and supply of a property
type and the geographic market area for the property type.
Market area - ✔✔The area associated with a subject property that contains its direct
competition.
Market Area Analysis - ✔✔The objective analysis of observable and/or quantifiable
data indicating discernible patterns of urban growth, structure, and change that may
detract from or enhance property values, focuses on four sets of considerations that
influence value: social, economic, governmental, and environmental factors.
Microeconomics - ✔✔The study of the economics of individual spheres of activity or
patterns and behaviors, e.g. a firm, an industry, a retail market, a consumer segment,
pricing, local employment.
Submarket - ✔✔A division of a total market that reflects the preferences of a particular
set of buyers and sellers, e.g. fast food restaurants as a submarket of the overall
restaurant market.
Market Segmentation - ✔✔The process by which submarkets within a larger market are
identified and analyzed.
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, Disaggregation - ✔✔The differentiation of a subject property from other properties on
the basis of subclassifications with differing product characteristics.
Market Analysis--Study of Supply and Demand - ✔✔A property type
Particular Property Characteristics
The most probably users of this type of property (demand)
Available competing properties (supply)
Demand Analysis - ✔✔Population Trends
Employment types and patterns
Mortgage information
Physical factors
Income & wage levels
Unemployment rates
Land use patterns
Local government
Population trends example - ✔✔Predictions show your town will grow by 1000 people
over the next 5 years. If the average household consists of two people, they will require
500 dwelling units. If 70% of them buy a dwelling, that will mean they absorb 350 units.
There will also be a demand for 150 units of rental.
*Percentage of population change over x years
*Positive or negative
*Compare with other areas
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 2
Market Analysis Exam Questions and
Answers 100% Pass
Market Analysis - ✔✔A process for examining the demand for and supply of a property
type and the geographic market area for the property type.
Market area - ✔✔The area associated with a subject property that contains its direct
competition.
Market Area Analysis - ✔✔The objective analysis of observable and/or quantifiable
data indicating discernible patterns of urban growth, structure, and change that may
detract from or enhance property values, focuses on four sets of considerations that
influence value: social, economic, governmental, and environmental factors.
Microeconomics - ✔✔The study of the economics of individual spheres of activity or
patterns and behaviors, e.g. a firm, an industry, a retail market, a consumer segment,
pricing, local employment.
Submarket - ✔✔A division of a total market that reflects the preferences of a particular
set of buyers and sellers, e.g. fast food restaurants as a submarket of the overall
restaurant market.
Market Segmentation - ✔✔The process by which submarkets within a larger market are
identified and analyzed.
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 1
, Disaggregation - ✔✔The differentiation of a subject property from other properties on
the basis of subclassifications with differing product characteristics.
Market Analysis--Study of Supply and Demand - ✔✔A property type
Particular Property Characteristics
The most probably users of this type of property (demand)
Available competing properties (supply)
Demand Analysis - ✔✔Population Trends
Employment types and patterns
Mortgage information
Physical factors
Income & wage levels
Unemployment rates
Land use patterns
Local government
Population trends example - ✔✔Predictions show your town will grow by 1000 people
over the next 5 years. If the average household consists of two people, they will require
500 dwelling units. If 70% of them buy a dwelling, that will mean they absorb 350 units.
There will also be a demand for 150 units of rental.
*Percentage of population change over x years
*Positive or negative
*Compare with other areas
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 2
