Market data show 200 price-reduced listings in the prior period and 242 in the current period. What is the percent change in price-reduced listings?
Correct Answer
C) 21 percent
Change = (242 − 200)/200 × 100 = 21%. Use the same population, period and price/listing definition throughout. 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 121 percent; misplacing the decimal (×10 instead of ×100) gives 2 percent.
Why This Is the Correct Answer
Option C is correct because the change is (242 - 200) / 200 x 100 = 42 / 200 x 100 = 21 percent. The prior period is the base, so the 42-listing increase is divided by 200, and the result is expressed as a percentage by multiplying by 100.
Why the Other Options Are Wrong
Option A: 2 percent
Option A is wrong because 2 percent comes from misplacing the decimal: (242 - 200) / 200 x 10 = 2.1, about 2. The correct calculation multiplies by 100, giving 42 / 200 x 100 = 21 percent.
Option B: 17 percent
Option B is wrong because 17 percent comes from dividing by the current figure instead of the prior figure: (242 - 200) / 242 x 100 = about 17. Percent change uses the prior-period base, so the answer is 42 / 200 x 100 = 21 percent.
Option D: 121 percent
Option D is wrong because 121 percent is the current level expressed as a percentage of the prior level: 242 / 200 x 100 = 121. The change is that figure minus 100, or (242 - 200) / 200 x 100 = 21 percent.
New minus old, over old
Percent change is new minus old, divided by old, times 100; the old value is the base you divide by.
How to use: Use this phrase on any period-to-period change question to pick the right denominator.
Exam Tip
If one answer equals the current value as a percentage of the prior (over 100 percent here), subtract 100 to get the change before choosing.
Common Mistakes to Avoid
- -Dividing the change by the current figure instead of the prior figure
- -Reporting the current level as a percent of the prior level (121 percent) as the change
- -Multiplying by 10 instead of 100
Concept Deep Dive
Analysis
This question tests a basic percent-change calculation applied to a market indicator, the count of price-reduced listings. The change is measured relative to the prior-period figure: subtract the prior count from the current count, divide by the prior count, and multiply by 100.
Background Knowledge
Percent change compares a later value with an earlier base value: (new - old) / old x 100. Appraisers use changes in indicators such as price-reduced, pending, expired and withdrawn listings to support conclusions about market trends. The comparison is meaningful only when the same population, period length and listing definition are used in both periods.
Real-World Application
An appraiser completing a market conditions analysis finds 200 price-reduced listings in the prior six months and 242 in the most recent six months for the same segment. The 21 percent increase is one piece of evidence of possible softening that the appraiser weighs with sales prices, days on market and inventory.
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