CHAPTER 6
Forecasting Ownership Benefit and Value: Market Research
Test Problems
1. Factors that affect housing market segmentation include all except:
2. The process of creating a “market-defining story” includes all of these questions
except:
3. The cycle of real estate market research starts with:
4. Features of an office building that may be important to one market segment or
another include:
5. A strong assertion about the large amount of data seemingly available for real
estate market research is that most of it is:
6. The approach to real estate market research advocated in this chapter starts with
the:
7. A powerful tool for managing, manipulating, and displaying location-specific data
is:
8. A very sophisticated, data intensive, and statistically intensive method of
examining market segmentation is known as:
9. Causes of real estate cycles include:
10. Data used in the market research cases in this chapter that are publicly available
over the Internet include all of the following except:
Study Questions
1. On the U.S. Census web site, use the approach shown in Explore the Web,
Chapter 5, to access the latest American Community Survey. For your county,
find the distribution of reported house values for owner occupied residences.
Solution: Is county specific. Below is an example result for Alachua County,
2. If you were looking for an apartment at this time, what are six non-locational
requirements that you would consider important?
Solution: Six non-locational requirements include an appealing floor plan and
3. Select a site in your city that is in a mixed use or non-residential area, and either is
vacant or appears to be ready for change (e.g., structure partially used or vacant,
or in need of refurbishing). Go the site during the morning commuting period, on
a business day. Situate yourself at or near the site and observe the activity at and
around the site. Pay particular attention to why people pass the site-where they
are coming from and where they are going. Note any nearby land uses or
pedestrian flows that could potentially involve the site. Then explore the area
around the site for a block or so in each direction, and record on a simple map the
main patterns of traffic flow, and the broad variations in the land uses. Finally,
after at least one observation session of 30 minutes, record your main
impressions, and any thoughts you have concerning the potential use of the site.
(Hint: A good way to select a site might be to go to a commercial broker or
appraiser and ask them about a site that they are intrigued with. It gives you an
interesting industry contact, and another perspective on the problem.)
4. Select a property of interest to you, or to an industry contact, for which market
research would be interesting. Examine the property, collect what information is
available about it, and then write a market defining story for the property using
the questions from the chapter as a guide.
5. University City is a town of more than 200,000 persons, with over 50,000
university and community college students. It has over 30,000 apartment units
which, with one or two exceptions, are garden apartments with a maximum of
three floors. Except for buildings within or immediately adjacent to the university
medical center, the football stadium, and the two graduate student dorms, only
two other buildings in the University City exceed five floors. A developer
proposes to introduce two 24-story apartment buildings halfway between the
downtown and the university, which are about 2.5 miles apart. One tower, would
be targeted to undergraduate students and the other to graduate students. The
downtown consists of little more than government offices, mostly local and
county. What questions should the developer ask in order to create a “market
defining story” for the twin towers?
Solution: This story needs to answer the following questions:
1. What is the real estate product under consideration?
2. Who are the customers (target market)?