15
7 exam questionsHigh Priority
Market cycles, supply/demand, CMA, and economic factors.
Quick Explanation
5 min readReal estate markets are affected by supply, demand, and economic factors. A CMA (Comparative Market Analysis) helps determine listing price. Absorption rate shows how fast homes are selling. A buyer's market has more supply than demand; seller's market is the opposite.
Key Points — What Matters for the Exam
1
Buyer's Market = more supply than demand, prices fall2
Seller's Market = more demand than supply, prices rise3
CMA = Comparative Market Analysis (used by agents, NOT appraisers)4
Absorption Rate = number of homes sold per month ÷ total available inventory5
6 months of inventory = balanced market6
Less than 6 months = seller's market; more than 6 months = buyer's marketMemory Trick
Absorption rate: homes sold ÷ total inventory. Under 6 months = seller's market (low supply). Over 6 months = buyer's market (high supply).
Common Trap Answers — Don't Fall For These
CMA is done by agents (NOT licensed appraisers)
Absorption rate uses months of inventory (NOT days)
6 months = balanced market (not buyer's or seller's)
Key Terms for This Unit (1)
Absorption Rate
Rate at which available properties are sold per month. Indicates buyer's vs seller's market.