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Suppose that we observe two comparable properties that have each sold twice within the past two years. Property A sold 24 months ago for $350,000 and Property B sold 18 months ago for $325,000. If the two properties were sold today at $375,000 and $340,000, respectively, estimate the change in market conditions (percentage change in price) per month, assuming we equally weight the two properties in our analysis.

Respuesta :

abdullahfarooqi

Answer:

0.28 %

Explanation:

Property A:

Percentage change in prices= (New price – old price)/Old price

= (375000 – 350000)/350000

=.0714= 7.14%

Monthly percentage= 7.14/24= .2975%

Property B:

Percentage change in prices= (New price – old price)/Old price

= (340000 – 325000)/325000

= .0461= 4.61%

Monthly percentage= 4.61/18= .256%

As they have equal weightage= (.256 + .2975)/ 2

= .2767= .28%

ogorwyne

The estimated change in market conditions from properties A and B is 0.28 percent

The new price if it was sold today = $375,000

The old price = $350,000

We have to find the percentage change in price

[tex]\frac{375000-350000}{350000}[/tex]

= 0.0714 for the property A.

The percentage in 24 months

= 0.0714

= 7.14/24 months

= 0.2975

For the property B.

[tex]\frac{340000-325000}{325000} = 0.0461\\= 4.61 percent[/tex]

4.61/18 months = 0.2561

[tex]Weghted AverageOfboth Properties = \frac{0.2561+0.2975}{2} \\= 0.28 percent[/tex]

The estimated change in market conditions from properties A and B is 0.28 percent  

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