Question 1

In the Elysian Forest example,the planned unit development was destined to be an unsuccessful venture from its inception because:
A)There was a comparable project in the community that was successful.
B)The site and location of the project was atypical of the area as there were significant disadvantages in terms of location and visual appeal.
C)The target market was a nontraditional segment that relied heavily on a small portion of the local University City population.
D)University City was a big,high density city that could not support such development.

Accepted Answer

C

Question 2

In the initial round of market analysis,analysts will attempt to provide key numbers that characterize the current condition and trend in the market.For rental retail space,the key market parameters in question would most likely include all of the following EXCEPT:
A)Projected occupancy growth
B)Projected rental rate growth
C)Current vacancy levels
D)Projected sales rates

Accepted Answer

Projected sales rates are not relevant to the market analysis of rental retail space. The other options mentioned, such as current vacancy levels, projected occupancy growth, and projected rental rate growth, are all key parameters that characterize the current condition and trend in the rental retail space market.

Question 3

In the Palm Grove Office Complex example,the project was destined to be an ill-fated venture from its inception for all of the following reasons EXCEPT:
A)The zoning laws of University City ultimately prevented the project's developers from starting the construction process
B)University City was not well-suited for large office space geared toward firms with greater than 25 employees
C)Palm Grove Office Complex lacked the visual exposure,convenient access,and parking that its competitors held significant comparative advantages in.
D)The structures were primarily designed as general-purpose office space,which excluded potential occupants such as laboratories or medical offices.

Accepted Answer

The zoning laws prevented the project from even starting, but the other reasons (B, C, and D) contributed to the project's eventual failure once it was allowed to proceed.

Question 4

Real estate market research is an important process used by analysts to facilitate a better understanding of a property's future profit potential.All of the following statements regarding market research are true EXCEPT:
A)Real estate market research should always be flexible since the research depends directly on the problem at hand.
B)Market research consists of a series of facts that fails to consider the role of investor behavior in the decision-making process.
C)Most important data for a given market study often is not publicly available.
D)Market research should focus specifically on market segments for the property involved,rather than on the aggregate real estate market.

Accepted Answer

Market research is not just a series of facts, but instead is a comprehensive process that takes into account multiple factors such as investor behavior, economic trends, and market segmentation.

Question 5

A planned unit development (PUD)is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT:
A)It encompasses a blend of detached single family,attached single family,townhouses and apartments.
B)It typically has larger individual lots with extensive side-yards on the property.
C)It typically includes a variety of common areas
D)It typically includes a variety of recreational facilities.

Accepted Answer

A planned unit development (PUD) encompasses a blend of different types of residential units, as well as common areas and recreational facilities. The PUD typically has smaller individual lots with less extensive side-yards on the property than traditional residential subdivisions, so option B is incorrect.

Question 6

The most common definition of a city used for government data collection and reporting,identified as a single labor market area centered around a city with a population of at least 50,000 people,is referred to as a:
A)township
B)central business district
C)metropolitan statistical area
D)county

Accepted Answer

The definition described in the question is commonly used to define a metropolitan statistical area (MSA), which is a statistical designation used by the United States Census Bureau and other agencies for specific urban areas in the U.S. An MSA includes a central city with a population of at least 50,000 people and its surrounding counties or adjacent counties that are economically and socially integrated with the central city. Therefore, option C is the best choice. Options A, B, and D are not the best choices as they do not accurately describe the definition given in the question.

Question 7

A popular adage in real estate is that property value is all about "location,location,location." However,for most property types in nonresidential realms,nonlocational requirements are equally or even more important.All of the following are examples of nonlocational factors EXCEPT:
A)Floor plate size
B)Amount of parking
C)Nature of current tenants
D)Proximity to modes of public transportation

Accepted Answer

All options except D are nonlocational factors. Proximity to modes of public transportation is a locational factor. Therefore, D is the correct answer as it is the only option that does not fit the criteria of a nonlocational factor.

Question 8

While predicting real estate cycles is difficult,a key indicator used to evaluate where a property is within the cycle is:
A)the level of household income
B)the form of land use
C)the size of the property
D)the number of building permits issued

Accepted Answer

The number of building permits issued is a key indicator of where a property is within the real estate cycle. An increase in building permits indicates a growth in the real estate market, while a decrease suggests a slowdown. This is because building permits reflect the level of new construction and development taking place, which in turn reflects the demand for real estate in a particular market.

Question 9

Since most data for a given market study is not readily available,analysts must be creative
In their use of data that they are able to obtain.The primary source for detailed household demographic information is:
A)the U.S.Bureau of the Census
B)the Federal Reserve
C)the local tax collector's office
D)Not available publicly

Accepted Answer

The U.S. Bureau of the Census is the primary source for household demographic information. The bureau conducts a census every 10 years, which provides detailed data on population, housing units, and other demographic characteristics. In addition, they conduct ongoing surveys such as the American Community Survey, which provides more frequent updates on key demographic information. Other sources, such as the Federal Reserve and local tax collector's office, may have some relevant data, but they are not the primary source for household demographic information.

Question 10

In collecting data for nonresidential property analysis,it is helpful to understand the business community that currently exists in the specific area in question.A preliminary approach for ascertaining the number of firms by size,industry,and location is to obtain data from:
A)the Bureau of Labor Statistics
B)the National Transportation Service
C)the U.S.Bureau of the Census: County Business Patterns
D)the Federal Reserve

Accepted Answer

The U.S. Bureau of the Census: County Business Patterns provides data on the number of businesses by size, industry, and location at the county level, making it a valuable source for understanding the business community in a specific area. The Bureau of Labor Statistics and the National Transportation Service do not provide this level of detail, while the Federal Reserve's data may be more focused on macroeconomic trends rather than specific local business data.

Question 11

Survey research has been applied to real estate markets at many levels.Despite its frequent application,analysts must be cautious with survey use because:
A)it is difficult to implement
B)interviews and questionnaires are not received well by consumers
C)it cannot be used in a small sample area
D)it can be fraught with abortive errors

Accepted Answer

Survey research can be fraught with abortive errors, which can skew the results and lead to incorrect conclusions. Therefore, analysts must be cautious when using surveys in real estate markets.

Question 12

A tool used by real estate analysts to relate a consumer's activities,interests,opinions,and values to a consumer's demographics is referred to as:
A)geographical information systems (GIS)
B)psychographics
C)survey research
D)census mapping

Accepted Answer

Psychographics is a tool used to relate a consumer's activities, interests, opinions, and values to their demographics. Geographical information systems (GIS) and census mapping are tools used to interpret and analyze geographic data, while survey research is a method used to collect data through surveys.

Question 13

In constructing a market-defining "story," it is helpful to answer a series of fundamental questions around which analysis can be built.Which of the following questions is designed to identify the target market?
A)What is the real estate product under consideration?
B)Who are the customers?
C)What aspects of the product do the customers care about?
D)Who are the competitors?

Accepted Answer

The question "Who are the customers?" is specifically designed to identify the target market. It helps to determine who the product or service is intended for and who is most likely to be interested in purchasing it. The other options focus on aspects of the product, competitors, and customer preferences, but do not directly address the target market.

Question 14

In contrast to conventional market analysis,the "story" approach to market research starts with an analysis of:
A)conditions in global real estate markets
B)conditions in national real estate markets
C)conditions in state real estate markets
D)conditions in the property specific market

Accepted Answer

The "story" approach to market research starts with an analysis of conditions in the property specific market. It focuses on understanding the unique characteristics of the property and the surrounding area, including demographic trends and economic indicators. This approach can provide a more accurate view of the factors that can impact demand for the property and its potential value.

Question 15

Computer software systems that enable one to manipulate and "map" information with great flexibility and speed are referred to as:
A)geographical information systems (GIS)
B)psychographics
C)survey research
D)census mapping

Accepted Answer

Geographical information systems (GIS) are computer software systems that allow users to manipulate and map information with great flexibility and speed, specifically in relation to geographical and spatial data. Psychographics and survey research are not related to this type of software, while census mapping is a more specific subset of GIS.

Question 16

A new residential development will face competition from other new developments,other builders,and sales of existing homes.To determine if demand in that market segment will be sufficient to justify proceeding with the project,a developer would be most interested in estimating a:
A)capture rate
B)capitalization rate
C)risk-free rate
D)risk premium

Accepted Answer

A capture rate is a measure of how many potential buyers in the market will choose to purchase the developer's homes rather than from other competitors. It takes into account factors such as location, price, quality, and features of the homes. Estimating the capture rate can help the developer determine the level of demand for their product and make an informed decision about whether or not to proceed with the project. The other options, capitalization rate, risk-free rate, and risk premium, are not directly related to evaluating demand for a specific development project.

Question 17

Professor James Graaskamp often asserted that when one buys real estate,what one is buying is a set of assumptions about the future.Therefore,it is not surprising that the
Beginning point of the market research process is to:
A)collect relevant data to examine the market and test initial definitions
B)evaluate the results of market analysis
C)construct a market-defining "story"
D)refine market definitions and collect additional data

Accepted Answer

The beginning point of the market research process is to construct a market-defining "story" which involves creating a narrative or hypothesis about the market that can guide further research and data collection.

Question 18

The presence of real estate cycles presents a major challenge when forecasting real estate market parameters.If the market value of a residential developer's project exceeds its construction costs,an increase in the supply of units will occur.As the market becomes oversupplied,we would expect which of the following to occur?
A)an increase in occupancy levels
B)an increase in market values
C)a decrease in real rental rates
D)a decrease in construction costs

Accepted Answer

As the market becomes oversupplied, there is an excess supply of units which leads to a decrease in real rental rates. This is due to the fact that property owners would have to lower prices to compete with one another in order to attract tenants.

Question 19

Preferences of households can vary with time,prosperity,and context.The nuances in the preferences or needs of market subgroups are commonly referred to as:
A)market segmentation
B)market parameters
C)market projection
D)market cycles

Accepted Answer

Market segmentation refers to the process of dividing a market into smaller subgroups with similar preferences or needs. These subgroups may vary over time, depending on changes in the context or prosperity, and can be used to target specific marketing strategies to different segments of the market. Market parameters, market projection, and market cycles do not adequately capture the nuances of household preferences or needs, and are not as directly related to market segmentation.

Question 20

Development of subdivisions,apartments,offices,or other commercial structures can have a lead time of two years or more.In general,the longer the construction lead time:
A)the lower the construction cost
B)the greater the supply of units
C)the lower the market value
D)the greater the amplitude of real estate cycles

Accepted Answer

Longer construction lead times allow for greater fluctuations in the real estate market, resulting in larger amplitude of real estate cycles. This is due to the fact that market conditions can change significantly during the extended construction period, leading to uncertain demand and supply trends, and ultimately impacting market values.

Quiz 6: Forecasting Value: Market Research

In the Elysian Forest example,the planned unit development was destined to be an unsuccessful venture from its inception because:

In the initial round of market analysis,analysts will attempt to provide key numbers that characterize the current condition and trend in the market.For rental retail space,the key market parameters in question would most likely include all of the following EXCEPT:

In the Palm Grove Office Complex example,the project was destined to be an ill-fated venture from its inception for all of the following reasons EXCEPT:

Real estate market research is an important process used by analysts to facilitate a better understanding of a property's future profit potential.All of the following statements regarding market research are true EXCEPT:

A planned unit development (PUD) is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT:

The most common definition of a city used for government data collection and reporting,identified as a single labor market area centered around a city with a population of at least 50,000 people,is referred to as a:

A popular adage in real estate is that property value is all about "location,location,location." However,for most property types in nonresidential realms,nonlocational requirements are equally or even more important.All of the following are examples of nonlocational factors EXCEPT:

While predicting real estate cycles is difficult,a key indicator used to evaluate where a property is within the cycle is:

Since most data for a given market study is not readily available,analysts must be creative In their use of data that they are able to obtain.The primary source for detailed household demographic information is:

In collecting data for nonresidential property analysis,it is helpful to understand the business community that currently exists in the specific area in question.A preliminary approach for ascertaining the number of firms by size,industry,and location is to obtain data from:

Survey research has been applied to real estate markets at many levels.Despite its frequent application,analysts must be cautious with survey use because:

A tool used by real estate analysts to relate a consumer's activities,interests,opinions,and values to a consumer's demographics is referred to as:

In constructing a market-defining "story," it is helpful to answer a series of fundamental questions around which analysis can be built.Which of the following questions is designed to identify the target market?

In contrast to conventional market analysis,the "story" approach to market research starts with an analysis of:

Computer software systems that enable one to manipulate and "map" information with great flexibility and speed are referred to as:

A new residential development will face competition from other new developments,other builders,and sales of existing homes.To determine if demand in that market segment will be sufficient to justify proceeding with the project,a developer would be most interested in estimating a:

Professor James Graaskamp often asserted that when one buys real estate,what one is buying is a set of assumptions about the future.Therefore,it is not surprising that the Beginning point of the market research process is to:

Preferences of households can vary with time,prosperity,and context.The nuances in the preferences or needs of market subgroups are commonly referred to as:

Development of subdivisions,apartments,offices,or other commercial structures can have a lead time of two years or more.In general,the longer the construction lead time: