Market Analysis & Trends Flashcards
7 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Market Analysis & Trends flashcards as text
Which indicator best reflects short-term supply pressure in a residential market?
Answer: Months of housing supply
Months of housing supply measures how long it would take to sell current inventory at the prevailing sales pace, directly reflecting supply pressure.
A neighborhood where 40% of sales are REO properties would most likely be classified as a:
Answer: Distressed market
High concentrations of REO (bank-owned) sales indicate widespread distress, and appraisers must identify this condition in their market analysis.
When analyzing absorption rate, an underwriter is primarily measuring:
Answer: How quickly listed homes are selling
Absorption rate measures the rate at which available homes are sold during a given time period, indicating market velocity.
In a rapidly appreciating market, an underwriter should be most concerned about which appraisal risk?
Answer: Comparables that lag actual market conditions
In fast-moving markets, recently closed sales used as comparables may not capture current price levels, leading appraisals to understate value or create time-adjustment disputes.
Which of the following best describes a 'buyer's market' condition relevant to CRU underwriting?
Answer: Inventory exceeds 6 months supply
A buyer's market is generally defined by inventory levels above 6 months, giving buyers negotiating leverage and indicating downward price pressure.
When reviewing a market conditions addendum (Form 1004MC), what does a declining trend in seller concessions typically signal?
Answer: Strengthening seller's market
Declining seller concessions indicate sellers have less need to incentivize buyers, signaling stronger demand and a seller-favored market.
A CRU underwriter notes that median list price is rising while median sale price is flat. This divergence most likely indicates:
Answer: Sellers are overpricing and buyers are resisting
When list prices rise faster than actual sale prices, it typically means sellers have unrealistic expectations and buyers — or appraisals — are not supporting those prices.