Property Valuation
Which of the following BEST describes 'scarcity' as a factor affecting property value in South Dakota?
AThe more common a property type, the more valuable it is
BLimited supply of a certain type of property increases its value when demand is constant or increasing✓ Correct
CScarcity of buyers in rural South Dakota reduces all property values uniformly
DOnly the scarcity of new construction affects values
Explanation
The economic principle of scarcity states that limited availability of a desirable item increases its value. Properties in high-demand areas (like Black Hills waterfront or Sioux Falls' best neighborhoods) command premium prices due to limited supply.
People Also Study
Related South Dakota Questions
- Which principle of value states that the value of a property is affected by the values of surrounding properties in South Dakota?Property Valuation
- A South Dakota appraiser is asked to determine the value of a 500-unit apartment complex in Sioux Falls. Which approach is most appropriate?Property Valuation
- South Dakota properties near the Badlands National Park or Black Hills may command premium values due to:Property Valuation
- South Dakota's 'county zoning' applies to areas outside incorporated municipal boundaries. This means rural properties near Sioux Falls that are NOT inside the city limits are subject to:Land Use & Zoning
- South Dakota's Rapid City area experienced a major flood in 1972 (Black Hills Flood). Properties in flood-prone areas of Rapid City Creek drainage have ongoing concerns related to:Environmental
- The principle of substitution in South Dakota real estate states that:Property Valuation
- The Black Hills region of South Dakota has significant amounts of federal land. Federal land use in South Dakota is managed primarily by:Land Use & Zoning
- Radioactive contamination from uranium mining in the Black Hills region of South Dakota is regulated under:Environmental
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.
Study This Topic
Practice More South Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Dakota Quiz →