A property sold for $60,000, then nine months later for $69,000 with no modifications. What is the indicated annual market conditions adjustment?

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Multiple Choice

A property sold for $60,000, then nine months later for $69,000 with no modifications. What is the indicated annual market conditions adjustment?

Explanation:
Market conditions changes over time affect property values, so we adjust for how the market moved between sale dates. In this case, the price rose from 60,000 to 69,000 in nine months, a $9,000 increase, which is a 15% rise over nine months (9,000 ÷ 60,000 = 0.15). To express this as an annual rate, scale to a full year: 15% × 12/9 = 20%. Therefore, the indicated annual market conditions adjustment is 20% per year.

Market conditions changes over time affect property values, so we adjust for how the market moved between sale dates. In this case, the price rose from 60,000 to 69,000 in nine months, a $9,000 increase, which is a 15% rise over nine months (9,000 ÷ 60,000 = 0.15). To express this as an annual rate, scale to a full year: 15% × 12/9 = 20%. Therefore, the indicated annual market conditions adjustment is 20% per year.

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