Why is the effective date important when valuing a site in a rapidly changing market?
Correct Answer
A) Site values change with market conditions over time
Why this is correct: Site values are sensitive to market conditions and change over time, especially in rapidly changing markets. The effective date anchors the value opinion to a specific point in time, requiring adjustments to comparable sales to reflect market changes up to that date. Why the other choices are wrong: Land is not exempt from market conditions adjustments; such adjustments are often critical for land. The effective date does not determine the zoning that applies; zoning is a legal matter fixed by ordinance. Older land sales may be used in analysis, but they typically require adjustment for time. Exam tip: Land value can be more volatile than improved property value; date adjustments are crucial.
Why This Is the Correct Answer
Why this is correct: Site values are sensitive to market conditions and change over time, especially in rapidly changing markets. The effective date anchors the value opinion to a specific point in time, requiring adjustments to comparable sales to reflect market changes up to that date. Why the other choices are wrong: Land is not exempt from market conditions adjustments; such adjustments are often critical for land. The effective date does not determine the zoning that applies; zoning is a legal matter fixed by ordinance. Older land sales may be used in analysis, but they typically require adjustment for time. Exam tip: Land value can be more volatile than improved property value; date adjustments are crucial.
More Land/Site Questions
Under which condition is the land residual technique most applicable?
Why can the same physical parcel carry different values in two assignments?
In a built-up area where no vacant land has sold for years, which approach to site value is the usual fallback?
How is entrepreneurial profit treated in the subdivision development method?
A land comparable sold 18 months ago in a market rising about 4 percent a year. What adjustment direction applies?
Why does a developer's required profit rise for a longer subdivision project?
How does holding cost enter the valuation of land bought for future development?
Excess land is best described as land that has which characteristic?
Plottage value arises in which of the following situations?
Which of the following is an off-site improvement rather than a site improvement?
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Sales Comparison Approach
16.4% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam