Physical characteristic
Immobility
A parcel stays where it is. Employment, access, and surrounding land uses help explain demand for that location. You cannot move a vacant lot from a weak market into a busy one.
1% of the exam · 8 free questions
Florida Markets and Analysis Practice Questions and Answers
Try 8 free Florida real estate market analysis questions, with explanations for every choice, six worked examples, and vacancy and inventory calculators. No account needed.
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Markets and Analysis Practice Questions
8 practice questions on markets and analysis, scored, each with a full explanation after you answer. Every question is also written out below if you would rather study at your own pace.
8 questions
~6 min
1% of the exam
60-second market analysis reviewSix clues to recognize before your next attempt
| Clue in a question | Best match |
|---|---|
| A parcel cannot move; nearby parcels still differ | Immobility and nonhomogeneity |
| Buyers prefer one location over another | Situs, an economic characteristic |
| More qualified buyers compete for the same stock | Upward price pressure, all else equal |
| Vacant units ÷ total units × 100 | Vacancy rate for the stated inventory |
| Active listings ÷ average monthly closed sales | Months of inventory |
| Permits rise, but construction has not started | Potential supply, not completed homes |
01 / What makes this market different?
Local, lasting, and never quite identical
Start with the parcel, then consider the market around it. Physical characteristics describe the real estate. Economic characteristics describe how people, costs, and rules affect its market.
Physical characteristic
Indestructibility
Land is durable and is not depreciated like a building. That does not mean its market value cannot fall or that erosion cannot change a site. Improvements can wear out; the land and the building are different assets.
Physical characteristic
Nonhomogeneity
No two parcels are exactly alike. Even matching floor plans can have different views, lot positions, conditions, and rights. Heterogeneity and uniqueness describe this same idea.
Economic characteristic
Situs
Situs is the preference for a location. A shorter commute or proximity to a shopping district may make one area more desirable. The site is physical; the market's preference for it is economic.
Government controls and slow adjustment also shape this market. Zoning can limit what can be built, and a proposed home takes time to become usable supply. FREC Course I syllabus, Section 15 (printed pages 46–47)
Choose the right submarket.
A downtown condo, a suburban starter home, and a warehouse serve different buyers. Define the geography, property type, and price range before comparing listings or sales. Use the same definitions and a suitable time period throughout the analysis.
02 / Identify the change
Supply, demand, and negotiating power
With other conditions unchanged, less supply or more demand tends to raise prices. More supply or less demand tends to lower them. When both change, the facts must tell you enough to judge the combined effect.
What affects demand?
The syllabus names property price, population and household composition, consumer income, mortgage-credit availability, and tastes or preferences. Demand needs purchasing power. Someone who wants a home but cannot finance or pay for it is not the same as a qualified buyer.
A new employer brings households with stable incomes into a neighborhood. With supply unchanged, competition for homes may increase.
What affects supply?
Look at available land, skilled labor, materials, and construction financing. Zoning, building requirements, and taxes also influence the market. Existing owners can add listings before builders can finish new homes.
Higher material costs and tighter construction lending can delay projects. A higher selling price alone cannot produce completed homes overnight.
Buyer's market
Available property is abundant relative to buyer demand. Buyers generally have more choice and room to negotiate. A well-priced home can still attract competing offers.
Seller's market
Buyer demand is strong relative to available property. Sellers generally have more negotiating power. An overpriced or unsuitable listing can still sit unsold.
Equilibrium
In the supply-and-demand model, quantity supplied equals quantity demanded at the equilibrium price. Actual local markets keep adjusting as buyers, listings, credit, and costs change.
Federal Reserve Education: market equilibrium explains the supply-and-demand model. A buyer's or seller's market describes relative negotiating conditions; it does not mean there are no sales or that prices change by a fixed percentage.
Price changes and demand shifts: what is the difference?
A lower price can increase the quantity buyers want to buy along a given demand curve. A change such as higher household income can shift demand itself. For an exam question, first identify the factor that changed and which conditions the question holds constant.
A household is the people who occupy one housing unit. It can be one person. Household formation can change housing demand even when total population changes little. U.S. Census Bureau: housing vacancy definitions and denominators
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03 / Work with the numbers
Two calculations, every step shown
Vacancy measures how much of an inventory is empty. Months of inventory compares listings with a sales pace. They answer different questions and use different denominators.
Examples are hypothetical. Calculations use unrounded values; displayed results round to two decimal places. The default inventory example uses a 12-month sales period.
Vacancy % = vacant units ÷ total units × 100
Occupancy % = occupied units ÷ total units × 100
Months of inventory = active listings ÷ average monthly closed sales
The syllabus explicitly includes vacancy and occupancy math. The inventory exercise extends the market-indicator discussion. Florida Realtors uses a 12-month average of monthly closed sales. FREC Course I syllabus, Section 15 (printed pages 46–47) · Florida Realtors: market research glossary and inventory method
04 / Read beyond one number
What the indicators can actually tell you
A useful market conclusion brings several measures together. Start by checking what each number counts, where it comes from, and which period it covers.
Price levels: check what sold
The median is the midpoint of sale prices. It can rise because more expensive homes made up a larger share of sales. A change in the area's median does not prove that every property gained the same percentage in value.
Vacancy: check the denominator
For a simple building problem, divide vacant units by total units. Published rental-vacancy statistics use defined rental inventories. Do not divide vacant rentals by every home in a county, or count an occupied home listed for sale as vacant.
Sales volume: count completed activity
Closed sales count completed transactions over a period. Pending sales concern contracts that may close later. More sales do not, by themselves, establish a price increase or tell you whether supply or demand caused the change.
Building permits: watch potential supply
A permit authorizes work. It is not a construction start, a completed home, or a sale. Watch permits alongside starts and completions before drawing a conclusion about available housing.
Months of inventory: measure stock against pace
Divide active listings by the average monthly closed-sales pace for the same segment. Florida Realtors uses a 12-month average of monthly closed sales. Other reports may use a different period or sales definition, so read the method before comparing results.
Six months is a result, not a verdict.
Do not automatically label every segment balanced at six months. Compare its history, recent prices, concessions, and sales activity. Two markets can have the same inventory ratio while buyers face very different choices.
Census new-home sales are counted at a signed contract or accepted deposit, rather than at closing. They cannot simply be substituted for the closed-sales counts used in this calculator. U.S. Census Bureau: construction, sales, and months-supply definitions
Where do DUST and appraisal fit?
DUST means Demand, Utility, Scarcity, and Transferability. A desirable property needs usefulness, relative scarcity, and a transferable interest for value to be supported. Demand also needs purchasing power.
These characteristics of value belong to Section 16 on appraisal. Market analysis studies conditions in a segment; a CMA or appraisal applies relevant evidence to a particular property and assignment. A median sale price or inventory ratio alone is not that property's value.
05 / Try before you reveal
Six worked market scenarios
Answer in your own words before opening the solution. For the math, write the denominator and the time unit first.
Worked scenario 01
A rental building with 12 empty units
An 80-unit building has 68 occupied units. Every other unit is vacant and available for rent. What are its physical vacancy and occupancy rates?
Show the answer and reasoning
15% vacant and 85% occupied.
80 − 68 = 12 vacant units. Divide 12 by 80, then multiply by 100: 15%. Occupancy is 68 ÷ 80 × 100 = 85%. Both calculations use the same 80-unit inventory.
Worked scenario 02
A year of sales, a month of supply
One segment has 240 active listings and 480 closed sales during the preceding 12 months. What is its months supply using that average sales pace?
Show the answer and reasoning
6 months of inventory.
First convert the sales period: 480 ÷ 12 = 40 sales per month. Then 240 ÷ 40 = 6 months. Dividing 240 by 480 produces 0.5 years, not 0.5 months. This assumes no new listings and an unchanged sales pace.
Worked scenario 03
Same homes, a different commute
Two similar subdivisions have comparable available homes. A new transit connection makes one much easier to reach from a major employment center. Which term describes buyers' resulting preference for that location?
Show the answer and reasoning
Situs.
The preference is economic. The parcels' inability to move is immobility, and differences between parcels are nonhomogeneity. Access can change how buyers value a location even though the land has not moved.
Worked scenario 04
A growing buyer pool
A hospital expands and brings in qualified households seeking homes nearby. Available inventory has not changed. What price pressure would you expect, all else equal?
Show the answer and reasoning
Upward pressure from increased demand.
The change is in the number of willing, able buyers. It is not an increase in housing supply. Prices tend to move upward when demand rises against unchanged supply, but the facts do not give a percentage increase.
Worked scenario 05
More permits, but no finished homes yet
Residential permits doubled this quarter. A report concludes that twice as many new homes are already available to occupy. Is that conclusion supported?
Show the answer and reasoning
No. Permission to build does not establish completion.
Projects may be delayed, changed, or never started. Compare permits with construction starts and completions. The permitting data alone cannot tell you how many homes are ready to occupy.
Worked scenario 06
A county headline and a condo listing
Countywide single-family inventory fell, but active condo listings in a particular price range increased and condo sales slowed. Which evidence is more relevant to a condo in that range?
Show the answer and reasoning
The matching condo submarket, with its own inventory and sales pace.
Hold geography, property type, price band, and reporting method consistent. The county headline is context. It cannot replace evidence about competing condos, and neither statistic alone establishes this condo's value.
06 / Review every answer
All 8 market analysis questions and answers
Choose a question to review its answer, the reasons the other choices fail, and the supporting sources. No quiz completion or account is required.
Study mode · Every question explained8 questions, answer reasoning, and 24 explanations of the other choices
Try each question before opening its answer. These are original practice items, not actual or recalled Pearson VUE exam questions.
Question 1 · mkt-1 · DUST and purchasing power
A buyer wants a waterfront home but has neither the cash nor access to financing to purchase one. Which DUST element is missing from desire alone?
Show answer and explanation
Answer A. Demand backed by purchasing power
Demand requires both desire and purchasing power. The buyer wants the home but cannot pay for it on these facts. DUST stands for Demand, Utility, Scarcity, and Transferability. These value characteristics appear in Section 16 on appraisal and help explain market behavior.
Remember: Interest in a property does not, by itself, establish effective demand.
Why the other choices do not work
B. Utility for a residential use
The facts do not say the home lacks usefulness. They describe the buyer’s ability to pay.
C. Scarcity relative to competing properties
Scarcity concerns limited supply relative to demand, not this buyer’s finances.
D. Transferability of the ownership interest
Nothing in the question prevents the relevant ownership interest from being conveyed.
Sources: FREC Course I syllabus, Section 16: characteristics of value
Report a problem with mkt-1Question 2 · mkt-2 · Supply and price pressure
In one local price range, fewer homes are offered for sale while demand stays unchanged. All else equal, what pressure does this put on the market?
Show answer and explanation
Answer C. Upward price pressure as buyers compete for fewer homes
A decrease in supply with demand unchanged tends to put upward pressure on prices. Buyers compete for fewer available properties. That is a directional conclusion; it does not establish how much any listing will sell for.
Remember: A supply change and a demand change are different. The question holds demand constant.
Why the other choices do not work
A. Downward price pressure because there are fewer listings
Fewer available homes against unchanged demand tend to increase, rather than reduce, competition.
B. No price pressure unless new homes are built
The existing resale inventory affects price pressure even without new construction.
D. An increase in demand caused solely by the lower listing count
A lower listing count changes supply. It does not, by itself, shift buyer demand.
Sources: Federal Reserve Education: market equilibrium · FREC Course I syllabus, Section 15 (printed pages 46–47)
Report a problem with mkt-2Question 3 · mkt-3 · Buyer and seller conditions
A condo segment has ample competing listings, weak buyer demand, and sellers increasingly willing to make concessions. Which description best fits?
Show answer and explanation
Answer D. A buyer’s market, because buyers have more choices and negotiating power
This is a buyer’s market. The important relationship is available supply compared with demand. Many competing listings and weak demand generally give buyers more room to negotiate price or terms.
Remember: Name the market for the side with the negotiating advantage, not the side with more participants.
Why the other choices do not work
A. A seller’s market, because sellers control the asking prices
Setting an asking price does not give a seller control over buyer demand or the final agreement.
B. Equilibrium, because buyers and sellers still complete some transactions
Completed transactions can occur in any market. They do not establish equilibrium.
C. A seller’s market, because more owners want to sell
A larger number of competing sellers generally weakens, rather than strengthens, their bargaining position.
Sources: FREC Course I syllabus, Section 15 (printed pages 46–47) · Federal Reserve Education: market equilibrium
Report a problem with mkt-3Question 4 · mkt-4 · Physical characteristics
Two homes have the same floor plan, but one backs onto a busy road and the other overlooks a park. Which physical characteristic explains why they are not interchangeable?
Show answer and explanation
Answer B. Nonhomogeneity, because the properties are not identical
Nonhomogeneity means no two parcels are exactly alike. Matching floor plans do not erase differences in location, surroundings, condition, or rights. Heterogeneity and uniqueness express the same idea.
Remember: Situs concerns preference. The question asks which physical characteristic describes the properties’ differences.
Why the other choices do not work
A. Situs, the economic preference for an area
Situs concerns the market’s preference for a location. The requested physical characteristic is uniqueness.
C. Indestructibility, because land is durable
Durability concerns the enduring nature of land, not differences between the two properties.
D. Immobility, because property cannot be relocated
Immobility explains fixed location, but nonhomogeneity specifically describes why the properties are not identical.
Sources: FREC Course I syllabus, Section 15 (printed pages 46–47)
Report a problem with mkt-4Question 5 · mkt-5 · Situs versus immobility
Buyers increasingly prefer a neighborhood after a new transport link reduces the commute to nearby jobs. Which economic characteristic does this illustrate?
Show answer and explanation
Answer C. Situs
Situs is area preference. Better access to employment can make one location more desirable to the relevant buyers. The land remains fixed in place; the economic preference for that location has changed.
Remember: Fixed location is immobility. Preference for the location is situs.
Why the other choices do not work
A. Indestructibility
Indestructibility concerns land’s durability, not changing buyer preferences.
B. Immobility
Immobility means the land cannot move. It does not name the preference described here.
D. Nonhomogeneity
Nonhomogeneity concerns differences between properties. Situs identifies the preference for this area.
Sources: FREC Course I syllabus, Section 15 (printed pages 46–47)
Report a problem with mkt-5Question 6 · mkt-6 · Constraints on new supply
Local demand for homes increases, but building materials become more expensive and construction loans become harder to obtain. What is the most reasonable conclusion?
Show answer and explanation
Answer A. New housing supply may respond slowly despite stronger demand
Materials and construction financing are supply factors. Higher costs and tighter credit can delay or limit new building, even when demand grows. Usable housing takes time to add through planning, financing, and construction.
Remember: Land is fixed in location. The number of housing units and listings can still change.
Why the other choices do not work
B. The changes mainly increase households’ ability to qualify for purchase loans
The question concerns financing for builders and their material costs, not improved mortgage access for buyers.
C. Builders can add completed units immediately once asking prices rise
Higher prices cannot eliminate the time needed to finance and build a home.
D. The amount of housing supply is permanently fixed because land cannot move
Immobility does not make the stock of housing units or active listings permanently fixed.
Sources: FREC Course I syllabus, Section 15 (printed pages 46–47) · St. Louis Fed: the housing supply challenge (April 8, 2026)
Report a problem with mkt-6Question 7 · mkt-7 · Vacancy and occupancy rates
An apartment building has 80 units. Of these, 68 are occupied and the other 12 are vacant. Using the whole building as the inventory, what are the vacancy and occupancy rates?
Show answer and explanation
Answer D. 15% vacant and 85% occupied
Vacancy is 12 ÷ 80 × 100 = 15%. Occupancy is 68 ÷ 80 × 100 = 85%. Both use the same 80-unit denominator, so the two rates add to 100%.
Remember: Divide by total units, not occupied units. A count of empty units is not yet a percentage.
Why the other choices do not work
A. 17.65% vacant and 82.35% occupied
12 ÷ 68 gives approximately 17.65%, but occupied units are the wrong denominator for this question.
B. 12% vacant and 68% occupied
12 and 68 are counts. Divide each by 80 and multiply by 100 to express percentages.
C. 85% vacant and 15% occupied
These are the right percentages attached to the wrong categories.
Sources: FREC Course I syllabus, Section 15 (printed pages 46–47) · U.S. Census Bureau: housing vacancy definitions and denominators
Report a problem with mkt-7Question 8 · mkt-8 · Months of inventory
A property segment has 900 active listings and 1,800 closed sales over the preceding 12 months. Using the average monthly sales pace, how many months of inventory does it have?
Show answer and explanation
Answer B. 6 months
First find monthly sales: 1,800 ÷ 12 = 150. Then divide active listings by that monthly pace: 900 ÷ 150 = 6 months. It estimates how long the current inventory would last with no new listings and the same sales pace.
Remember: Match the units before dividing. Six months of inventory does not mean each home will take six months to sell.
Why the other choices do not work
A. 0.5 months
900 ÷ 1,800 uses annual sales. The result is half a year, which is six months.
C. 150 months
150 is the average number of monthly sales, not months of supply.
D. 2 months
1,800 ÷ 900 reverses inventory and annual sales and does not give months of inventory.
Sources: Florida Realtors: market research glossary and inventory method
Report a problem with mkt-8
07 / Match the published scope
Your route through Section 15
The candidate booklet gives this topic a 1% weight. The Course I syllabus supplies the learning objectives. Use this map to find the matching guide and questions.
Physical and economic characteristics
Immobility, durability, uniqueness, situs, government influence, and slow adjustment.
Supply and demand factors
Households, income, credit, preferences, land, labor, materials, and construction finance.
Interpreting market conditions
Buyer and seller markets, price pressure, and consistent submarkets.
Market indicators and calculations
Price levels, vacancy and occupancy, sales volume, permits, and supplemental inventory practice.
DBPR sales associate exam outline, Section XV (1%) · FREC Course I syllabus, Section 15 (printed pages 46–47). DUST is an appraisal cross-reference. Months-of-inventory practice adds context; neither is presented as a separately weighted Section 15 exam requirement.
How to use this topic in your study plan
Start with the quiz, then review the reasoning behind any missed answer. Use the calculators to practice turning units and sales figures into rates. Each worked example shows the fact or denominator that decides the answer.
The published exam outline assigns Real Estate Markets and Analysis 1%, about one question on a 100-question exam. Section 15 of the Course I syllabus covers market characteristics, supply and demand, and indicators including vacancy and occupancy calculations. Months of inventory adds practical context; DUST connects this topic with Section 16 on appraisal.
Real estate market analysis questions
Frequently asked questions
What does Florida real estate market analysis cover on the exam?
The DBPR sales associate outline assigns 1% to Real Estate Markets and Analysis. Section 15 of the Course I syllabus covers physical and economic characteristics, supply and demand factors, market conditions, and indicators such as prices, vacancy, sales volume, and building permits. It explicitly includes occupancy and vacancy calculations.
Why are real estate markets local?
Land cannot move to another market. Employment, access, competing properties, and buyer preferences differ by location. Start with a defined area and property segment. A statewide headline provides context, but it does not establish conditions for every neighborhood or price range.
What are the three physical characteristics of real estate?
The syllabus identifies immobility, indestructibility or durability, and nonhomogeneity. Land stays in place and is durable; no two parcels are exactly alike. Buildings can depreciate, and land value can fall even though land is not depreciated like an improvement.
What is situs in real estate?
Situs means area preference. It is an economic characteristic: buyers or users may prefer one location because of access, amenities, or nearby employment. Immobility is the physical fact that land cannot move. Situs is the preference for where it is.
What are the four elements of value?
DUST stands for Demand, Utility, Scarcity, and Transferability. Demand requires desire backed by purchasing power. Utility is usefulness, scarcity is limited availability relative to demand, and transferability concerns the ability to convey the relevant interest. These characteristics of value are covered in Section 16 on appraisal.
What is the difference between a buyer’s market and a seller’s market?
A buyer’s market generally has ample available property relative to demand, giving buyers more negotiating power. A seller’s market generally has strong demand relative to supply, giving sellers more negotiating power. These describe tendencies in a defined market, not guaranteed outcomes for individual listings.
What factors affect real estate demand?
The syllabus names property price, population and household composition, consumer income, mortgage-credit availability, and consumer tastes or preferences. Demand involves willingness and ability to buy. A household is the people occupying one housing unit, and can consist of just one person.
What factors affect the supply of housing?
Land, skilled labor, materials, and construction financing affect the ability to add housing. Government controls also influence the market. New construction takes time, while existing owners can increase or reduce active listings. A fixed location does not mean the number of homes or listings is permanently fixed.
How do you calculate vacancy and occupancy rates?
For a simple inventory where every unit is occupied or vacant, vacancy rate equals vacant units divided by total units, multiplied by 100. Occupancy rate equals occupied units divided by the same total, multiplied by 100. With 12 vacant and 68 occupied units out of 80, the rates are 15% and 85%. Published housing surveys can use more specific inventory definitions.
How do you calculate months of inventory?
Divide active listings by average monthly closed sales for the same market segment. With 900 active listings and 1,800 closings over 12 months, the average is 150 closings per month and inventory is 6 months. Florida Realtors uses a 12-month average; always check a report’s method before comparing figures.
Is six months of inventory always a balanced market?
No single cutoff establishes conditions for every location, property type, or price band. Treat a reported benchmark as a convention, then compare the segment’s history, pricing, concessions, and sales activity. Months of inventory alone cannot predict a home’s selling time or final price.
Can months of inventory be calculated when there are no sales?
With zero closed sales in the chosen period, there is no positive sales pace to divide by. A finite months-supply estimate cannot be calculated from those inputs. Report the lack of activity and inspect a suitable longer period or comparable segment; do not replace the result with zero months.
Does a rise in building permits mean more homes are ready to occupy?
No. A permit authorizes construction. A start marks construction activity, and a completion marks a later stage. Permits can indicate potential supply, but projects may be delayed or never started. The number of permits is not the number of completed homes.
Is months of inventory the same as absorption rate or vacancy rate?
No. Months of inventory expresses available listings relative to a monthly sales pace. Absorption can be expressed as units sold per period or as a percentage of a stated inventory, so its definition and time period matter. Vacancy rate measures unoccupied units within a defined inventory. The measures are related but not interchangeable.
Are these actual Florida exam questions, and what date does this guide cover?
These are original practice questions, not actual or recalled state-exam items. The guide was reviewed on September 9, 2026 for material applicable through September 5, 2026, using the published DBPR outline, Course I syllabus, and cited definitions. Numerical examples are hypothetical. This page does not report live September housing conditions.
How can I keep preparing in the app?
Open the Pass Florida web app or download the app for iPhone and Android. Start free, then choose the full package if it suits your study plan. Use topic practice, missed-answer review, and timed exams to prepare across all 19 areas. Your score from this free website quiz does not transfer to the app or predict a state-exam result.
Sources and editorial review
Sources behind this guide
Published by Pass Florida. Reviewed on for material applicable through .
The review covers eight questions, every answer choice, calculator formulas, and six worked scenarios. Examples are hypothetical. This is an exam study guide, not a report of live September 2026 housing conditions.
Exam scope comes from the January 2025 candidate booklet and the Course I syllabus effective January 1, 2023, as listed by DBPR. Section 15 is on printed pages 46–47; the DUST cross-reference is in Section 16. Data-method sources explain the indicators rather than establish additional exam requirements.
These original practice questions are published independently by Pass Florida. The guide is not endorsed by DBPR, FREC, or Pearson VUE.
Found a mistake? Use the link under a question or send a correction.
Exam scope
Economic principles
Market indicators and calculation methods
Key terms for markets and analysis
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