In a market sample, the median list price was $400,000 in the prior period and $428,000 in the current period. What is the percent change in the sample's median list price?
Correct Answer
C) 7.0 percent
Change=($428,000−$400,000)/$400,000×100=7%. This is the numerical result under the stated definitions, not an automatic market-condition or property-value conclusion. Common errors: dividing by the current figure instead of the prior figure gives 6.5 percent; reporting the current level as a percentage of the prior level gives 107.0 percent; misplacing the decimal (×10 instead of ×100) gives 0.7 percent.
Why This Is the Correct Answer
Option C is correct because ($428,000 − $400,000) / $400,000 × 100 = $28,000 / $400,000 × 100 = 7.0 percent.
Why the Other Options Are Wrong
Option A: 0.7 percent
Option A, 0.7 percent, misplaces the decimal by multiplying by 10 instead of 100: $28,000 / $400,000 × 10 = 0.7. The correct calculation is $28,000 / $400,000 × 100 = 7.0%.
Option B: 6.5 percent
Option B, 6.5 percent, divides by the current figure instead of the prior figure: $28,000 / $428,000 × 100 = 6.5. Percentage change uses the prior $400,000 as the base, giving 7.0%.
Option D: 107.0 percent
Option D, 107.0 percent, reports the current level as a percentage of the prior level ($428,000 / $400,000 × 100 = 107.0) rather than the change. Subtracting the 100% base gives the correct 7.0% change.
New minus old, over old
Percentage change equals the new figure minus the old figure, divided by the old figure, times 100.
How to use: Use this formula for any period-to-period percentage change.
Exam Tip
Watch for distractors that use the wrong base, report a ratio instead of a change, or shift the decimal.
Common Mistakes to Avoid
- -Dividing by the current figure instead of the prior one
- -Reporting 107% instead of a 7% change
- -Treating median list-price change as a matched value trend
Concept Deep Dive
Analysis
This question tests a basic percentage-change calculation using median list prices. The change is measured from the prior-period figure as the base. The result describes the change in the sample's median asking price, not a matched-property value trend.
Background Knowledge
Form 1004MC reports median list prices, median sale prices and related statistics by period. Changes in medians can reflect shifts in the mix of homes listed, not only changes in value, so they are a market indicator rather than a direct time adjustment.
Real-World Application
An appraiser sees the median list price for a neighborhood rise from $400,000 to $428,000 between periods. The appraiser reports a 7% increase in median asking price while noting that changes in listing mix may affect this figure.
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