Question 1

Suppose a developer is interested in building a new subdivision of single-family homes. Through her market research, the developer has determined that the target market segment potential in year 1 consists of 176 households. If the developer projects that she will be able to sell 44 homes in the first year, what is her assumed capture rate?

Accepted Answer

A)  15% 
B)  25% 
C)  44% 
D)  75%

Question 2

Professor James Graaskamp often asserted that when one buys real estate, what one is buying is a set of assumptions about the future. Therefore, it is not surprising that the beginning point of the market research process is to:

Accepted Answer

A)  collect relevant data to examine the market and test initial definitions 
B)  evaluate the results of market analysis 
C)  construct a market-defining "story" 
D)  refine market definitions and collect additional data

Question 3

A developer of a new townhome community has gathered the following market information for University City. The developer estimates that there will be 1,200 home (all types) sales in University City over the next year. An analysis of demographic information has revealed that the core market share for the townhome project within the community is 10%. Assuming a capture rate of 20%, what is the developer's first year projection of townhome sales in the new community?

Accepted Answer

A)  24 units 
B)  120 units 
C)  240 units 
D)  600 units

Question 4

In the initial round of market analysis, analysts will attempt to provide key numbers that characterize the current condition and trend in the market. For rental retail space, the key market parameters in question would most likely include all of the following EXCEPT:

Accepted Answer

A)  Projected occupancy growth 
B)  Projected rental rate growth 
C)  Current vacancy levels 
D)  Projected sales rates

Question 5

A planned unit development (PUD) is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT:

Accepted Answer

A)  It encompasses a blend of detached single family, attached single family, townhouses and apartments. 
B)  It typically has larger individual lots with extensive side-yards on the property. 
C)  It typically includes a variety of common areas 
D)  It typically includes a variety of recreational facilities.

Question 6

Since most data that we would like to conduct a thorough market analysis is unavailable, a researcher will find it useful to find a data series that will closely represent the variable of interest. We typically refer to this type of variable as a:

Accepted Answer

A)  Relevant 
B)  Proxy 
C)  Correlation 
D)  Cluster

Question 7

Suppose that you were interested in building a luxury apartment complex in your hometown. In your analysis of local demographics, you discover that the target market makes up only 5% (core market share) of the households that currently rent (or would be interested in renting) in this town. If market experts believe that a total of 5,000 apartment units will be rented in your entire hometown within the next year, what is the projected number of units the developer could expect to lease in year 1 if he is able to capture 20% of the market potential?

Accepted Answer

A)  1000 units 
B)  500 units 
C)  250 units 
D)  50 units

Question 8

Suppose a developer is interested in building a new apartment community. Through her market research, the developer has determined that the target market segment potential in year 1 consists of 100 households. The developer believes that the target market segment potential will grow by 5% annually over the next five years. If the developer projects a capture rate of 25% for each of the next five years, how many units does she plan on selling by the end of year 5?

Accepted Answer

A)  25 units 
B)  125 units 
C)  138 units 
D)  175 units

Question 9

When you are evaluating the prospects for a project that is new in your setting and therefore has no actual relevant market performance data, it is most helpful to use which of the following techniques as the basis for your analysis?

Accepted Answer

A)  Analogy 
B)  Fabrication 
C)  Cooperation 
D)  Recommendation

Question 10

Preferences of households can vary with time, prosperity, and context. The nuances in the preferences or needs of market subgroups are commonly referred to as:

Accepted Answer

A)  market segmentation 
B)  market parameters 
C)  market projection 
D)  market cycles

Question 11

The most common definition of a city used for government data collection and reporting, identified as a single labor market area centered around a city with a population of at least 50,000 people, is referred to as a:

Accepted Answer

A)  township 
B)  central business district 
C)  metropolitan statistical area 
D)  county

Question 12

In the Elysian Forest example, the planned unit development was destined to be an unsuccessful venture from its inception because:

Accepted Answer

A)  There was a comparable project in the community that was successful. 
B)  The site and location of the project was atypical of the area as there were significant disadvantages in terms of location and visual appeal. 
C)  The target market was a nontraditional segment that relied heavily on a small portion of the local University City population. 
D)  University City was a big, high density city that could not support such development.

Question 13

Suppose that you have begun to gather some demographic data in order to project the potential sales of a new development project. The developer hopes to be able to target the following household types who fall in the age 55 and up housing market: Seniors - Employed Part Time; Seniors - Retired / Not in Assisted Living. Utilizing the following population information, determine the core market share that the development project yearns to target with this project. Total Senior Households: 25,000; Seniors - Employed Full Time: 8,000; Seniors - Employed Part Time: 2,500; Seniors - Retired / Not in Assisted Living: 12,000; Seniors - Retired / In Assisted Living: 2,500

Accepted Answer

A)  58.0% 
B)  80.0% 
C)  90.0% 
D)  100.0%

Exam 6: Forecasting Value: Market Research