Which factor makes it difficult to estimate market value for property that has had few recent transactions?

Which factor makes it difficult to estimate market value for property that has had few recent transactions?

• A. It has many buyers.
• B. It has had few recent transactions involving comparable property.
• C. It has many sellers.
• D. It has a diverse range of prices for like kind and quality.

Answer: (B)

Estimating market value relies on comparing the subject property to similar properties that have recently sold. When there have been few recent transactions involving comparable property, there aren’t enough data points to anchor adjustments for differences in size, condition, or location. That scarcity makes it hard to determine a reliable value because the primary method—comparing recent sales—has little to go on. Having many buyers or many sellers doesn’t by itself provide a solid price anchor; it affects market activity, not the availability of comparable data. A wide range of prices for like-kind properties suggests variability, but without recent sales to base adjustments on, the estimate remains uncertain.

Estimating market value relies on comparing the subject property to similar properties that have recently sold. When there have been few recent transactions involving comparable property, there aren’t enough data points to anchor adjustments for differences in size, condition, or location. That scarcity makes it hard to determine a reliable value because the primary method—comparing recent sales—has little to go on.

Having many buyers or many sellers doesn’t by itself provide a solid price anchor; it affects market activity, not the availability of comparable data. A wide range of prices for like-kind properties suggests variability, but without recent sales to base adjustments on, the estimate remains uncertain.