A neighborhood with a wide range of property values requires the appraiser to:

Correct Answer

D) Focus on the segment the subject competes in

Why this is correct: The governing concept is that a 'neighborhood' can contain multiple distinct market segments. The appraiser must identify the specific price band or segment in which the subject property competes, as that is its relevant market for comparable selection and analysis. The original explanation correctly notes that a wide range indicates several markets sharing a name, and analysis must focus on the subject's competitive band. Why the other choices are wrong: 'Adjust all comparables to the median value' is wrong because forcing all data to a single median misrepresents the distinct market segments and violates the principle of analyzing the subject's actual competitive environment. 'Use the neighborhood's overall average price' is wrong because a single average would be statistically distorted by the wide range and not reflect any true market segment. 'Exclude the neighborhood from analysis' is wrong because a neighborhood with a value range is not inherently invalid; the appraiser must refine the analysis within it, not abandon it. Exam tip: When you see 'wide range of property values,' think 'multiple market segments' and immediately look for the option about analyzing the subject's specific competitive set.