An industrial building sold for $800,000. Six months later, it sold again for $880,000. No physical changes were made to the property over this time. What is the annual adjustment for market conditions indicated by this sale?

• A. Upward 10%
• B. Upward 30%
• C. Upward 20%
• D. Upward 40%

Answer: (C)

The key idea is converting a price change over a short period into an annual market-condition adjustment. Here, the price rose from 800,000 to 880,000 in six months. That’s a 80,000 increase, which is 80,000/800,000 = 10% over six months. Since six months is half a year, the equivalent annual rate is 10% × 2 = 20%. So the annual market conditions adjustment is an upward 20%.

Why the other numbers don’t fit: 10% reflects only the six-month change, not the full year. The 30% or 40% would imply much larger six-month or annual changes than what the observed six-month increase supports.