Property Valuation
A Minnesota appraiser finds that the subject property's neighborhood has been experiencing rapid price increases over the past 12 months. How does this affect the appraisal?
AThe appraiser ignores recent trends and uses only 3-year averages
BThe appraiser may make upward time adjustments to reflect market appreciation✓ Correct
CThe appraiser uses only sales from exactly 12 months ago for consistency
DRapid appreciation makes the sales comparison approach unreliable and requires cost approach only
Explanation
In an appreciating market, appraisers make time adjustments to bring older comparable sales up to current market conditions. If a comparable sold 8 months ago when the market was lower, the appraiser adjusts upward to reflect appreciation since that sale.
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