In a defined competitive market segment used for neighborhood supply analysis, active comparable listings totaled 280 at the start of the period and 210 at the end of the period (same listing criteria). What is the indicated percent change in listing inventory over that period?
Correct Answer
B) −25 percent
Percentage change = (210 − 280)/280 × 100 = -25%. Keep the stated numerator, denominator and units distinct. Common errors: dividing by the ending figure instead of the starting figure gives −33 percent; reporting the ending level as a percentage of the starting level gives 75 percent; misplacing the decimal (×10 instead of ×100) gives −3 percent.
Why This Is the Correct Answer
Option B is correct because (210 - 280) / 280 x 100 = -70 / 280 x 100 = -25 percent. The starting inventory of 280 is the base for measuring change over the period. A negative result shows that listing inventory declined.
Why the Other Options Are Wrong
Option A: −33 percent
Option A is wrong because -33 percent comes from (210 - 280) / 210 x 100, dividing by the ending figure instead of the starting figure. Using the starting figure of 280 as the base gives -25 percent.
Option C: −3 percent
Option C is wrong because -3 percent comes from misplacing the decimal: (210 - 280) / 280 x 10 = -2.5, which rounds to about -3. Multiplying by 100 instead gives the correct -25 percent.
Option D: 75 percent
Option D is wrong because 75 percent comes from 210 / 280 x 100, which reports the ending level as a percentage of the starting level rather than the change. The change is (210 - 280) / 280 x 100 = -25 percent.
New minus old, over old
Percent change is new minus old, divided by old, times 100. The old, starting number is the base.
How to use: Use this formula whenever a question asks for the percent change between two periods.
Exam Tip
Check that you divided by the starting value and multiplied by 100. A falling inventory should give a negative change.
Common Mistakes to Avoid
- -Dividing by the ending value instead of the starting value
- -Reporting the ending level as a percent of the start instead of the change
- -Misplacing the decimal when converting to a percentage
Concept Deep Dive
Analysis
This question tests calculating a percentage change in listing inventory. Percentage change uses the starting figure as the base: (ending - starting) / starting x 100. With 280 listings falling to 210, the change is -25 percent.
Background Knowledge
Appraisers track listing inventory, sales and absorption to judge whether supply is rising or falling in the subject's competitive market. Measuring the percent change from the start of a period shows the direction and size of supply trends, which supports market conditions analysis.
Real-World Application
An appraiser compares active listings in the subject's segment at the start and end of a six-month period and sees inventory drop. The appraiser reports the percent decline as evidence of tightening supply in the market conditions analysis.
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