In a market where sales volume has fallen 40% but median prices are unchanged, the appraiser should:
Correct Answer
C) Treat volume decline as an early signal and widen the evidence base
Why this is correct: A sharp decline in sales volume with stable median prices often signals a market shift where sellers resist price cuts, creating a lag. The appraiser must expand evidence beyond closed sales to pending listings, concessions, and marketing times to gauge true market conditions. Why the other choices are wrong: "Apply an automatic downward adjustment of forty percent" is incorrect; adjustments are not mechanical. "Conclude the market is entirely stable and unchanged" ignores the volume warning signal. "Suspend the assignment until volume recovers fully" is not practical or required. Exam tip: Volume leads price. When volume drops, dig deeper into listings and time-on-market.
Why This Is the Correct Answer
Why this is correct: A sharp decline in sales volume with stable median prices often signals a market shift where sellers resist price cuts, creating a lag. The appraiser must expand evidence beyond closed sales to pending listings, concessions, and marketing times to gauge true market conditions. Why the other choices are wrong: "Apply an automatic downward adjustment of forty percent" is incorrect; adjustments are not mechanical. "Conclude the market is entirely stable and unchanged" ignores the volume warning signal. "Suspend the assignment until volume recovers fully" is not practical or required. Exam tip: Volume leads price. When volume drops, dig deeper into listings and time-on-market.
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