Property Valuation
An absorption rate in a Minnesota market analysis represents:
AThe percentage of a building's space that is occupied
BThe rate at which available properties are being sold or leased in a given market over a period of time✓ Correct
CThe rate at which mortgage loans are repaid
DThe rate of appreciation in property values
Explanation
The absorption rate measures how quickly available properties are being sold or leased in a market. It is calculated as: sales per month / available listings = absorption rate.
People Also Study
Related Minnesota Questions
- A Minnesota appraiser adjusts a comparable sale for time. The comparable sold 8 months ago and the market has been appreciating at 0.5% per month. What is the time adjustment for a $300,000 comparable?Property Valuation
- In a competitive market analysis (CMA), a Minnesota agent adjusts a comparable sale that has one fewer bathroom than the subject property by:Property Valuation
- A capitalization rate that is lower than the market average for similar Minnesota properties suggests the subject property is:Property Management
- In Minnesota appraisal practice, 'paired sales analysis' is used to determine the market value of:Property Valuation
- In a Minnesota comparative market analysis, an appraiser finds a comparable home sold for $310,000 but it has an extra bathroom worth $8,000 compared to the subject property. What adjusted value is used?Property Valuation
- A Minnesota apartment building with 15 units rents at an average of $1,100/month. The current cap rate for similar properties is 6.5%. What is the estimated value using the income approach?Real Estate Math
- A Minnesota lender's written policy is to charge a higher interest rate for loans on properties in areas with high crime statistics. Under ECOA and the Fair Housing Act, this policy:Finance
- A Minnesota property is assessed at 85% of its market value of $320,000. The tax rate is $22 per $1,000 of assessed value. What is the annual property tax?Real Estate Math
Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Study This Topic
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →