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30 August, 16:42

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.

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  1. 30 August, 16:48
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    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%
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