Pending sales in the subject's market were 45 in the prior period and 54 in the current period. What is the percent change in pending sales?
Correct Answer
C) 20 percent
Percentage change=(54−45)/45×100=20%. This is the stated sample measure, not an automatic market-condition classification or value adjustment. Common errors: dividing by the current figure instead of the prior figure gives 17 percent; reporting the current level as a percentage of the prior level gives 120 percent; misplacing the decimal (×10 instead of ×100) gives 2 percent.
Why This Is the Correct Answer
Option C is correct because the percent change is (54 − 45) ÷ 45 × 100 = 9 ÷ 45 × 100 = 20 percent. The prior period is the base because the change is measured from it. This is a sample statistic, not an automatic market-condition classification or value adjustment.
Why the Other Options Are Wrong
Option A: 2 percent
Option A, 2 percent, comes from misplacing the decimal: (54 − 45) ÷ 45 × 10 = 2. The correct calculation multiplies by 100: 9 ÷ 45 × 100 = 20 percent.
Option B: 17 percent
Option B, 17 percent, comes from dividing by the current figure instead of the prior figure: (54 − 45) ÷ 54 × 100 = about 17. The correct base is the prior period: 9 ÷ 45 × 100 = 20 percent.
Option D: 120 percent
Option D, 120 percent, reports the current level as a percentage of the prior level: 54 ÷ 45 × 100 = 120. The change is 120 − 100 = 20 percent, calculated as (54 − 45) ÷ 45 × 100.
New minus old, over old
Percent change equals new minus old, divided by old, times 100.
How to use: Use this whenever a question asks for the change from a prior period to a current period.
Exam Tip
Check which figure is the base; dividing by the newer figure is a frequent trap.
Common Mistakes to Avoid
- -Dividing the change by the current figure
- -Reporting the current level as a percentage of the prior level
- -Multiplying by 10 instead of 100
Concept Deep Dive
Analysis
This question tests the percent change formula. Subtract the prior figure from the current figure, divide by the prior figure, and multiply by 100. The distractors come from using the wrong base, reporting a level instead of a change, or misplacing the decimal.
Background Knowledge
Percent change measures how much a figure moved relative to its starting value. Appraisers use it for trends in pending sales, prices, listings and days on market. Market research may include analysis of pending sales and expired and withdrawn listings, but a single percent change does not by itself classify the market.
Real-World Application
An appraiser compares pending sales in the subject's market over two consecutive periods and finds they rose from 45 to 54. The appraiser reports a 20 percent increase and considers it with other indicators such as listings and price trends before drawing any market-conditions conclusion.
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