Property Valuation
An appraiser in Fargo, North Dakota notes that the city's population growth is driving demand for housing. This is an example of which value influence?
APhysical characteristics
BEconomic forces affecting real estate value✓ Correct
CLegal factors
DSocial factors
Explanation
The four forces affecting real estate value are: social (population trends, demographics), economic (employment, income, interest rates), government (taxes, zoning, regulations), and physical/environmental (location, topography, climate). Population growth driving housing demand is an economic/social force.
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Key Terms to Know
Zoning
Local government regulations that control land use by dividing areas into zones specifying permitted uses, building sizes, and densities.
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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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