Market data for competing three-bedroom ranch homes show a median sale price of $340,000 in January 2026 and $357,000 in November 2026, with a steady rise between the two months. The average list price of active listings in November was $364,900. What monthly market conditions rate does this trend indicate, as a simple rate on the January median?
Correct Answer
D) 0.50%
The median rose $17,000 on a $340,000 base, a 5% change, over the 10 months from January to November, so the simple monthly rate is 5% ÷ 10 = 0.50%. Dividing by 12 treats the span as a full year (0.42%), counting both end months gives 11 months (0.45%), and using the November median as the base gives 0.48%. Active list prices show asking prices, not the sale price trend.
Why This Is the Correct Answer
Option D is correct because ($357,000 − $340,000) ÷ $340,000 = 5.0%, and January to November is 10 months, so 5.0% ÷ 10 = 0.50% per month as a simple rate.
Why the Other Options Are Wrong
Option A: 0.42%
Option A, 0.42%, divides the 5.0% change by 12, treating January to November as a full year. Only 10 months passed, so 5.0% ÷ 10 = 0.50%.
Option B: 0.45%
Option B, 0.45%, divides 5.0% by 11 by counting both January and November. The months elapsed between the two medians are 10, not 11.
Option C: 0.48%
Option C, 0.48%, uses the November median as the base: $17,000 ÷ $357,000 = 4.76%, then ÷ 10. The change is measured from the earlier, January, value.
Change over start, then months
Divide the price change by the starting price, then divide by the months elapsed, counting the gap and not both end months.
How to use: Use this when a trend is given as two prices on two dates and you need a monthly rate.
Exam Tip
Count months as the difference between dates (November minus January = 10), and use the earlier figure as the base unless the question says otherwise.
Common Mistakes to Avoid
- -Counting both end months as elapsed time
- -Using the later price as the base
- -Treating list prices as evidence of the sale price trend
Concept Deep Dive
Analysis
This tests turning a median price trend into a monthly rate: find the percentage change on the starting value, then divide by the number of months elapsed. The list price is a distractor because it reflects asking prices, not sales.
Background Knowledge
A market conditions adjustment is usually stated as a percentage change per time period. A trend in median sale prices for competing homes can indicate that rate, measured as the percentage change from the earlier value divided by the months elapsed, when the mix of homes sold is reasonably consistent.
Real-World Application
An appraiser charts monthly medians for competing ranch homes and sees a steady rise from January to November. She converts the 5% gain to 0.50% per month and checks it against paired resales before applying it.
More Sales Comparison Questions
Supported adjustments are: non-market financing $10,000, GLA $36/sf, garage $3,500 per car, pool/spa $12,500. A comparable identical to the 2,800 sf subject sold for $267,000 with non-market financing. What is its adjusted price?
Using GLA $36/sf and non-market financing $10,000: a 3,100 sf comparable sold for $277,000 with non-market financing; the subject has 2,800 sf. Bath count differences are not adjusted. What is the adjusted price?
Using garage $3,500 per car and pool/spa $12,500: a comparable with a 2-car garage and a pool/spa sold for $268,000. The subject has a 3-car garage and no pool. What is the adjusted price?
Using GLA $36/sf, garage $3,500 per car and pool/spa $12,500: a 2,600 sf comparable with a 2-car garage and a pool/spa sold for $264,000. The subject is 2,800 sf with a 3-car garage and no pool. What is the adjusted price?
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