Property Valuation
When an appraiser in Billings, Montana observes that comparable sales in the area have been selling faster than 6 months ago, this indicates:
AA buyer's market with declining values
BAn appreciating or seller's market with increasing demand✓ Correct
CA stable market with no change in values
DLender-driven inflation of prices
Explanation
Faster absorption rates (properties selling more quickly) indicate increased demand relative to supply—a seller's market—which typically results in upward pressure on prices.
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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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
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