Review Questions Market Dynami Lyrics

Review Questions Market Dynamics

This is a Self-a__essment; your answers will not be scored.

Click your mouse inside the text box and then type in your answer. The "Solution" b___on will appear. When you have finished, click on the "Solution" b___on to compare your response to the model answer.

Question #1

Five graphs are illustrated for the fictitious Westville market illustrating selective data over various periods. a__ume that Ms. Jones is contemplating selling her residential bungalow currently valued in the $200,000 range. Decide whether this is an opportune time for marketing the property by identifying and briefly explaining four key trends that could impact the seller.
Click here to open the charts in a new window. From there, you may print a copy for ease of reading.

Solution

No single correct answer for the fictitious Westville market exists. A valid response, however, might include:
The long term decline in interest rates has the net effect of lower borrowing costs that, in turn, normally increases resale activity. It should be noted that the noticeable decline has occurred both in short and longer term mortgage rates.
The Consumer Price Index is rising and may indicate some movement toward higher prices. The shelter component has been rising steadily. Interpretations will vary on the impact of this indicator.
However, Smith need not be concerned with this in the short term when marketing his property. Unemployment rates rose during the summer period, but have fallen. Increases in employed persons normally translates into market strength. Housing starts have risen in the past year and have remained more or less consistent in this particular market, undoubtedly indicating more builder confidence in the market due to increased sales.
Even without a full understanding of market trends in Westville, it should be evident that prices have more or less stabilized according to the graphs and MLS sales have increased substantially over the past year. Generally, Smith would be entering an active, stable market with purchasers enjoying low mortgage interest rates.