Which evidence base best supports the DIRECTION of a market-conditions adjustment in the most recent sixty days?
Correct Answer
B) Pendings, price cuts, and listing withdrawal rates
Verified recent contracts, listings, price reductions and withdrawals can provide timely context while closed sales reflect earlier contract dates. Reconcile these indicators with relevant completed sales and mix, incentives and seasonal changes. Asking-price cuts or withdrawals alone do not quantify a property-value adjustment.
Why This Is the Correct Answer
Option B is correct because pending sales, price cuts and withdrawal rates reflect current buyer and seller behavior. Closed sales reflect earlier contract dates, so recent contract and listing activity can show direction more quickly. An appraiser who uses pending sales or expired and withdrawn listings should explain and support those conclusions.
Why the Other Options Are Wrong
Option A: Closed sales from six months ago
Option A, closed sales from six months ago, reflects contracts signed even earlier. That evidence is too dated to show the market's direction in the most recent sixty days.
Option C: The prior calendar year's annual appreciation rate
Option C, the prior calendar year's annual appreciation rate, describes an earlier period and averages over a full year. It does not show what happened in the last sixty days.
Option D: National house-price index headlines
Option D, national house-price index headlines, describe broad national trends. Local segments can move differently, so national headlines are weak evidence for a specific local market.
Pendings point the way
Closed sales show where the market was; pendings and price cuts show where it is heading.
How to use: Use this idea when asked which data show the most recent market direction.
Exam Tip
When a question stresses the most recent period or direction, favor current contract and listing activity over older closed sales or national data.
Common Mistakes to Avoid
- -Relying only on older closed sales to judge current direction
- -Applying national index trends to a local market
- -Treating price cuts alone as a measured value adjustment
Concept Deep Dive
Analysis
This question tests which data best show the current direction of a market. Closed sales reflect contracts signed weeks or months earlier, so they lag. Pending sales, price reductions and listing withdrawals reflect what is happening now and give timely evidence of direction.
Background Knowledge
Closed sales are the primary evidence for value, but they lag the market because they reflect earlier contract dates. Current indicators such as pending sales, active listings, price reductions and withdrawals can show the direction of change. These indicators should be reconciled with completed sales, with attention to mix, incentives and seasonality.
Real-World Application
An appraiser sees closed sales still rising but notices many recent price cuts and fewer pending contracts. These signals suggest the market may be softening. The appraiser explains the evidence and reconciles it with the closed sales before deciding on any adjustment.
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Previous Question
Sale-to-list (STL) ratio = sale price ÷ list price. Six recent competitive sales have STL ratios of 0.97, 1.00, 0.99, 1.02, 1.01 and 1.04. What is their arithmetic mean STL ratio, to three decimal places?
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Using the same sale-price/original-list-price definition and comparable samples, a segment’s average sale-to-list ratio rises from 96% to 100%. What limited interpretation is most supportable?