Which measure most directly signals demand strength in a housing market?
Correct Answer
D) The pace of sales against current listings
Why this is correct: Demand strength is measured by absorption—the pace of sales relative to current listings (e.g., months of supply). A fast sales pace indicates strong demand. Why the other choices are wrong: Building permits measure future supply, not current demand. Average housing age describes stock, not demand. Number of agents is a market participant count, not a demand metric. Exam tip: Demand = absorption rate (sales/listings).
Why This Is the Correct Answer
Why this is correct: Demand strength is measured by absorption—the pace of sales relative to current listings (e.g., months of supply). A fast sales pace indicates strong demand. Why the other choices are wrong: Building permits measure future supply, not current demand. Average housing age describes stock, not demand. Number of agents is a market participant count, not a demand metric. Exam tip: Demand = absorption rate (sales/listings).
More Market Questions
Building permit data is most useful to an appraiser as:
In the neighborhood life cycle, what characterizes the decline stage?
In which phase of the real estate cycle do rising vacancies first meet a still-growing construction pipeline?
The principle of consistent use prohibits:
Employment in a one-industry town falls 20%. Through what mechanism does housing demand contract?
Frictional vacancy in a rental market refers to:
The principle of opportunity cost applied to real estate means:
A neighborhood with a wide range of property values requires the appraiser to:
In-migration to a metro area increases housing demand primarily by:
Absorption rate expressed in units per month is calculated by:
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