Section 2 Unit 2 Practice Exam

It's difficult to tell. Historically, property values fluctuate up and down in the short term.

David purchased a house three years ago for $300,000. Considering historical property value fluctuations, what is the likely value of the property today?

Recovery

In which phase of the real estate market cycle would you expect to see property undervalued and a large supply of homes on the market?

Expansion

In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence, and an increase in buyers in the market?

Over supply

In which phase of the real estate market would you expect to see properties selling for more than they're worth, many buyers in the market, and lots of new construction?

Recession

In which phase of the real estate market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?

More than $50,000

Robert and Jill purchased a single-family home in the suburbs for $50,000 nearly 40 years ago. Considering historical property value fluctuations, what is the likely value of the property today?

Buyer's market

The supply of properties available in the market is greater than the number of buyers. What type of market does this describe?

Seller's market

There are fewer properties available in the market than there are interested buyers. What type of market does this describe?

American Taxpayer Relief Act of 2012

Which act made some mortgage insurance premium deductions available to certain taxpayers?

Mortgage Forgiveness Debt Relief Act of 2007

Which act temporarily removed the requirement that taxpayers whose homes were sold as a result of a foreclosure had to include the loan write-off amount as taxable income?

Baby Boomers

Which generation are children of the Silent Generation and products of the U.S. population explosion after World War II?

Millennials

Which generation financed their homes due to also having other debt obligations?

Properties are selling for more than their appraised value, many buyers are in the market, and there is lots of new construction.

Which of the following best describes the state of the market during the over-supply phase of the real estate cycle?

Construction

Which of the following items directly influences real estate supply?

High but stabilized unemployment and a high number of foreclosures

Which one of the following best describes the state of the market during the recovery phase of the real estate cycle?

Increase

Historically, what do property values tend to do over long periods of time?