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Apartment market area delineation.

abstract

In all property markets, market area delineation is an important task that precedes the analysis of demand and supply in the market area. This article reviews the literature on apartment market area delineation and the currently recognized technique to perform the analysis. It then takes a step forward by presenting a logical process for delineating the apartment market area. It points out that the important factors in the process of delineation are household linkage patterns, household psychographics, competitive facilities, and both physical and psychological barriers. It provides illustrations that depict the reasoning process for apartment market area delineation.

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Real estate analysts must identify the geographic extent of the market area for an apartment property (1) before analyzing the demand for apartments in the market and the supply of competitive apartment units. (2) There is a causal relationship here; an accurately delineated housing market area generates a more accurate estimate of the demand and the supply, which in turn generates a more accurate estimate of effective gross income. The reverse also is true; for example, an inaccurate specification of a market area as a two-mile radius when in fact it is only a one-mile radius generates inaccurate estimates for both demand and supply. (3)

An early publication on the topic of housing market analysis observed the following about this relationship:</p> <pre> The delineation of housing market and sub-market areas is an important part of the whole process of housing market analysis. An erroneous or inadequate delineation undermines the reliability of the analysis, leads to unsound and misguiding conclusions, and, consequently, could cause costly mistakes in decisions predicated on the analysis. The analyst must guard against a perfunctory delineation of the housing market area and its sub-areas. (4) </pre> <p>But, unlike the delineation process for a retail establishment such as a shopping center, and even a hotel/motel, the level of understanding of the delineation process for the geographic market area for an apartment property is lacking. This article expands on the existing literature on the subject of apartment market delineation to generate a set of concepts and a process to delineate the geographic market area for an apartment property.

Literature Review

The literature on apartment market delineation is scant at best. Unlike retail and hotel/motel properties, residential properties have not been the subject of developed discussions on market area delineation.

The literature on residential market area delineation provides a number of definitions of a residential market area. The following are four examples:

* A housing market area is a geographic area within which all dwelling units are linked together in a chain of substitution, or in other words, the units are in competition with one another as alternatives for the users of housing. (5)

* The market study area encompasses the competitive demand for and supply of space that is similar to the subject property. It is the subject's competitive market in terms of geographical area, product type, and price. (6)

* A real estate market is a group of individuals and firms that are in contact with one another for the purpose of conducting real estate transactions. (7)

* The defined geographic area in which the subject property competes for the attentions of market participants; the term broadly defines an area containing diverse land uses. (8)

These definitions explain that the market area contains competitive properties and potential customers for housing units. However, the definitions do not provide information on the analytical methods, procedures, or techniques that can be used to delineate the residential market area.

The literature for residential properties is much more explicit in identifying the demand and supply factors in the market area that need to be considered once the geographic market area has been defined or delineated. The literature states, for example, that on the demand side, "several demographic factors are of primary importance in analyzing the market potential for a project: employment, population and households, and household income." (9) On the supply side of the market, similar statements are also made; for example, "supply factors include the total number of housing units by unit type, price range, and absorption." (10) Un fortunately, these statements start with the assumption that the analyst knows the specific geography that constitutes the market area in which the supply and demand factors interact. Neither of the above statements on supply and demand, or their sources, mentions how the analyst is to determine the geographic market area, delineate the market area, or identify the appropriate geography for the analysis.

Another example of this lack of direction regarding the method or technique to delineate a geographic market area can be found in the NCREIF Suggested Market Analysis Guidelines, which suggest the following steps:

Market area delineation

1. Define and describe the metropolitan area.

A. Identify the economic base industries of the metropolitan area, with emphasis on activities that influence the quantity, quality (risk), and the duration of the specific space market.

B. Identify possible and expected changes in the economic base.

2. Delineate market study area(s). The market study area encompasses the competitive demand for, and supply of, space that is similar to the subject property. It is the subject's competitive market in terms of geographical area, product type, and price.

3. Demarcate the boundaries of the market on a market area map.

4. Explain reasons for selecting the boundaries of the market area."

Notice how the guidelines start and conclude without addressing the threshold issue of market delineation. Guideline 1 requires an analysis that may not be a required part of the geographic market area for a specific property. A study of the metropolitan area may be irrelevant for some or all submarkets in a metropolitan area; there are areas of economic decline in economically growing metropolitan areas and vice versa. Guideline 2 is a definition, not a method or technique. Guideline 3 is an instruction to go to the conclusion: draw the boundary lines. Guideline 4 requires an explanation for selecting the boundary line. At no point do the guidelines offer any instructions on how to select the boundary line.

The Appraisal of Real Estate provides a conceptual procedure when it makes the following statements:</p> <pre> The investigation begins with the subject property and proceeds outward, identifying all relevant actual and potential influences on the property's value that can be attributed to the property's location. The appraiser extends the search far enough to encompass all of the influences

the market indicates will affect a property's value. (12) The boundaries of market areas ... identify the areas that can influence a subject property's value. These boundaries may coincide with observable changes in land use or demographic and socioeconomic characteristics.

Physical features such as structure types, street patterns, terrain, vegetation and lot sizes help to identify land use districts. Transportation arteries (highways, major streets, and railroads), bodies of water (rivers, lakes, and streams), and changing elevation (hills, mountains, cliffs, and valleys) can also be significant boundaries. (13) </pre> <p>However, these statements fall short in providing an operational procedure to delineate a market area. The text then instructs the appraiser with the following steps:

To identify the boundaries of a market area

1. Examine the subject property as a start to the delineation process.

2. Examine the area's physical characteristics. Identify points where these characteristics change and note any physical barriers.

3. Draw preliminary boundaries on a map to connect the points where physical characteristics change.

4. Determine how well the preliminary boundaries correspond to the demographic data. The market area boundaries are often overlaid on a map of geographical areas (e.g., zip codes, census tracts, block groups). (14)

These four steps are not an adequate procedure to delineate an apartment market area, however, because a market area considers more than just the physical features of the adjacent and/or proximate geography. Step 3 instructs the appraiser to connect the points in space where "physical characteristics change," but there is no mention of the nature and spatial placement of space users, the linkages, or competitive properties.

Fanning, Grissom, and Pearson point to the use of several key factors in the market delineation process. They state that to delineate a market for an existing apartment complex, an analyst should "determine the boundaries of the market area based on time-distance relationships. Distances to employment and support facilities (e.g., shopping centers, schools) are important as are the locations of competitive housing that appeals to the same customers as the subject." (15) The key elements for delineating an apartment market area are presented, but again, no information is offered on how to do this.

The most explicit current statement in the literature about delineating a residential market area includes the following list of factors and

comments:

* Travel time from major employment centers--By identifying major employment centers and making assumptions regarding acceptable commuting time, a market analysis can define a target market area.

* Mass-transportation facilities and highway links-Availability, ease of access, location of the transport corridors, and the speed at which they operate during peak travel times.

* Existing and anticipated patterns of development

* Socioeconomic composition--An area's income, age, household characteristics and other demographic characteristics influence housing choice and location

* Physical barriers--Natural features (rivers, bluffs, etc.) and man-made features (highways, railroads, etc.)

* Political subdivisions--Municipal boundaries can be especially important when adjoining jurisdictions differ markedly in political climate, tax policies, or status. School district policies can be critical if households with school-age children represent a major market segment. (16)

Although this list of factors provides important guidance, it still does not provide any information on how to use these factors to delineate the geographic market area.

In conclusion, a review of the literature shows that the current literature on residential market area does not provide any examples, explanations, guidelines, illustrations, procedures, or techniques for determining the market area. At best, the literature identifies the factors that need to be considered in the process of delineating a residential market area, but it does not show the analyst how to apply those factors to the delineation process.

In the following sections, this article discusses the factors that affect the geographic market area for apartment properties. It then addresses the primary and secondary supply and demand links related to a subject property and how these affect delineation of the apartment trade area and apartment market area. Illustrative scenarios are then presented along with guidelines for delineating the market areas and a discussion of adjustments for market rent. Finally, conclusions are presented.

Factors Affecting the Geographic Market Area for Apartment Properties

The important factors in apartment market area delineation are household linkage patterns, household psychographics, competitive facilities, and both physical and psychological barriers. The customers of an apartment complex are households that have important linkages between the apartment land use and other land users. For single-person households, the linkages are personalized. For multiple-person households and families, the linkages reflect the frequency and the significance of these relationships for all of the individuals. (Who needs to live closer to work? Is the trip to school more important than the commute to work?) The frequency of using the linkages can vary and the group dynamics in the household can apply different weightings to the importance of these linkages.

These other land users are the apartment market area's demand generators and include at least the following substantive economic land users:

* Employment centers (office, industrial, retail, medical, educational, and other facilities) and modes of travel

* Shopping facilities

* Residential locations of family and friends

* Entertainment/recreational/cultural facilities such as restaurants, clubs, theaters, sports arena, parks, and golf courses

In addition to these linkages, psychographic variables associated with these linkages also enter the analysis. The psychographic variables include the following:

* Lifestyle choices, such as the physical urban/ suburban environment, neighborhood appeal and prestige considerations

* Preferences for housing unit styles (in-town apartments or townhouses versus suburban two-story or ranch structures)

* Preferences for neighborhoods and school districts

* Attitudes toward the commute in general, focusing on issues such as willingness to drive, the quality of the route environment, and modes of transit

* Attitudes toward traffic congestion in particular monetary, nonmonetary (leisure time foregone), and psychic costs (aggravation, frustration, irritation, etc.)

These factors operate on the demand side of the market and affect the primary and secondary demand links.

In addition to the demand-side linkages, competitive facilities are also an important factor on the supply side of market area delineation. As in the retail and hotel markets, competition can be direct or indirect depending on the degree of comparability. Apartment housing is not a physically homogeneous product. There are two aspects of apartment heterogeneity. A given geographic area can contain a combination of new and existing high-rise, mid-rise, garden apartments, and mini mid-rise apartments. (17) All apartment units in a specific geographic area are substitutes for each other to some degree. They differ in their degree of substitutability. Depending on the characteristics of the subject property, the other apartment housing units are either direct competition (near "perfect" substitutes) or competition of lesser degree.

Apartment units can have spatially separated substitutes. For example, garden apartments on the east side of town can be substitutes for similar units on the north side of town. This relationship is true when these two geographic areas maintain the same linkages that vary only in direction. Commuters from the east side of town drive west to the major employment center while the commuters from the north side of town drive south to the jobs.

Lastly, physical barriers can curtail a market area in a certain direction and psychological barriers can act like physical barriers for some households. The principal psychological barriers appear to be intersections with heavy traffic and reports of frequent accidents, industrial areas with high volumes of truck traffic, physically dilapidated areas, and areas purported to be unsafe, high crime areas.

Primary and Secondary Links in Apartment Market Area Delineation

The primary demand link is the spatial relationship with the centers of employment for the member(s) of the household. The secondary demand links are the spatial relationships to the other land users, as previously discussed. The psychographic variables affect the importance, significance, and/or strength of the demand links.

On the supply side of the market, several substantive relationships can exist and need to be recognized in the analysis. These include primary, secondary, and tertiary supply links.

With the primary supply link, the spatial relationship is to directly competitive apartment complexes in close proximity and the same employment linkages.

Secondary supply links are less directly competitive properties in close proximity. This category would include apartment complexes with different amenity packages, different rent structures, different unit sizes and designs, and different architectural features (garden units versus mid-rise units). Secondary supply links also include directly competitive apartment complexes that are not in close proximity but whose primary demand links are the same employment centers.

Tertiary supply links are less directly competitive apartment complexes that are not in close proximity but whose primary demand links focus on the same employment centers.

The Apartment Trade Area and Apartment Market Area

There are two geographic areas that need to be considered: the apartment trade area (ATA) and the apartment market area (AMA).

The ATA is the geographic area immediately surrounding the subject property in which it competes for tenants with its direct and most proximate competition. The ATA is the geographic area adjacent to the subject property that contains all of its direct competitors that are in the same spatial position with regard to the demand generators that affect the households living or desiring to live in apartments in the area.

The AMA is the portion of the local economy, other than the ATA, from which the subject property can draw tenants and which contains indirect competition. An AMA is a geographic area adjacent to the ATA of the subject property that contains apartments that are good to excellent substitutes for each other. These apartments can be spatially separated if they are generally in the same type of neighborhood and maintain a similar but not identical linkage pattern.

The ATA and the AMA are an analyst's judgment based on data obtained from the inspection of the subject property and its directly competitive rental properties. The factors that affect this judgment are location relative to important demand generators and linkages; the nature and quality of the dwelling units and the site improvements; and the relative rent of the other rental properties.

The following illustrative scenarios provide a basis to apply these delineation concepts in a market analysis of an apartment project. The array of cases discussed here are not a full taxonomy of all possible cases, but they provide a starting point for the analyst to apply the definitions of these geographic areas.

Illustrative Scenarios

The ideas underlying the apartment market area (AMA) and trade area (ATA) require an analysis of selected cases. This is true because the pattern of apartment complexes is not homogeneous across a metropolitan area. The following discussion presents three illustrative scenarios.

Scenario One: Single Employment Node

Case A-One Demand Generator/One Grouping of Competitors/No Other Linkage Considerations The simplest situation for delineating an apartment market area is the one where the subject property (S) and several similar apartment projects are adjacent to a major employment center, such as a 2,000,000-square-foot office node, and there are no other demand generators or apartment complexes for miles in all directions. The AMA and the ATA in this case are obvious. As shown in Figure 1, there is a primary demand link to the employment center (E), a primary supply link for each of the subject's direct competitors (C1, C2, and C3), and a secondary supply link to property not in direct competition with the subject (K1). The AMA for the subject property encompasses the demand generator, the grouping of primary competitors, and a secondary competitor. The AMA for the subject property is coterminus with the ATA.

[FIGURE 1 OMITTED]

Case B-One Demand Generator/Neighborhood Differences/No Other Linkage Considerations

Case B in Figure 1 is a modification of Case A. In Case B, the demand generator is now a central business district (CBD). The area west of the CBD, the location of the subject property, includes new construction in rehabilitated, gentrified neighborhoods, while the area east of the CBD is an older neighborhood with older structures in need of rehabilitation. The AMA and the ATA for the subject property enclose E, [C1.sub.p], and [C2.sub.p], but not the other apartment complexes, which are not direct competitors due to location, age/condition of the property, and neighborhood prestige or status. Since only one primary demand link exists, the AMA encloses this demand generator and all competitive properties, primary and secondary supply links-[C1.sub.p], [C2.sub.p], and [K1.sub.s]. The ATA for the subject property encloses E (the primary demand link), [C1.sub.p], and [C2.sub.p], but not the other apartment complexes that are not direct competition due to their location, age/condition, neighborhood prestige or status, or other psychographic factors.

Scenario Two: Two Demand Generators/ Multiple Groupings of Competitors

Figure 2 expands the analysis into a more realistic set of circumstances by positing two demand generators and multiple geographically different groupings of apartment housing complexes. An initial underlying assumption in this case is that the neighborhood characteristics of all of the different geographies are similar as are the psychographic factors. Also, barriers are assumed not to exist.

[FIGURE 2 OMITTED]

In this case, E is the employment center and R is a recreational center. The [C.sup.**] apartment complexes are direct competitors in the subject property's ATA with two similar key linkages to the subject property; they are primary supply links. The [C.sup.*] apartment complexes are direct competitors that are not in the subject property's ATA, but they have one similar key linkage with the subject property; they are related secondary supply links. The C apartment complexes are direct competitors, but do not share a key linkage with the subject property.

The K apartment complexes are not direct competitors; they may be apartment complexes that are better than or not as appealing as, the subject property. The effect of K apartment complexes on the subject property, and the market and trade areas in which they compete, can vary in degree from strong to weak and possibly nonexistent. If the subject property is middle-income property based on its rent structure, low-income and subsidized housing across town (no common linkages with the subject) will have no effect on the subject. Luxury apartments in the adjacent complex may also have only a minimal effect if the rent differential existing in the market is large. If the K apartment is a unit in a high rise structure that carries the same monthly rent and is comparable to the subject property which is in a garden apartment complex (two or three stories with no elevator), the effect can be strong and closely approximate the effect of a [C.sup.*] or even a [C.sup.**]. All of this requires the appraiser's judgment as the relationships in the market and trade areas are analyzed.

The subject property's AMA is the cluster it shares with apartment properties that rely on the same primary demand link, E, and that have a primary supply link and a strong secondary supply link. The subject property's AMA contains two geographic clusters-[C.sup.**]1 and [C.sup.*]2 and the cluster of [C.sup.*]1, [C.sup.*]2, [C.sup.*]3, and K1. These properties rely on the same primary demand link E, but [C.sup.*]1, [C.sup.*]2, [C.sup.*]3, and K1 are also in close proximity to the other important demand generator, R, the recreation center. There may well be a market rent differential between the [C.sup.**]1 and [C.sup.**]2 cluster and the [C.sup.*]1, [C.sup.*]2, [C.sup.*]3, and K1 cluster due to their closer proximity to the both of the demand generators. An adjustment would have to be made for a comparison of the secondary supply links to the subject property.

The ATA of the subject property is the [C.sup.**]1 and [C.sup.**]2 cluster. These properties have the same primary demand link and they are primary supply links.

Figure 2 can be used to analyze the situation when the subject property is property C4. Here the ATA for C4 is the cluster of C2 and C3, the direct competitors, the primary supply links. C1 is a secondary supply link while the cluster of [C.sup.*]1, [C.sup.*]2, and [C.sup.*]3 are also secondary supply links. (K3 is not a comparable property.) The AMA contains the demand generators that are significant to the subject property. For C4 these are the employment center and the recreation center. So the AMA for property C4 would contain CI, and the [C.sup.*]1, [C.sup.*]2, [C.sup.*]3, and K1 cluster; and the ATA would contain C2, C3, C4, and K3.

Scenario 3: Multiple Employment Node Situation

Figure 3 presents a third scenario, where there are multiple employment nodes in a geographic area. The ATA for the subject property is the cluster of direct competitors [C.sup.**]1, [C.sup.**]2, and [C.sup.**]3. These properties have the same primary demand links to employment centers E1 and E3, and the same primary supply links among each other. The secondary supply links are clusters [C.sup.*]1 through [C.sup.*]6; they share a link to one of the employment centers E1 or E3. The AMA for the subject property consists of these primary and secondary supply links. Properties C1, C2, and C3 have a different primary demand linkage pattern with E2 and E4, so they are not part of the AMA for the subject property.

[FIGURE 3 OMITTED]

Guidelines for Delineating the Apartment Trade and Market Areas

The following guidelines for delineation of the apartment trade area and market area can be stated based on the scenarios presented:

* Apartment Trade Area (ATA): To delineate the ATA, group together the properties that have the same primary demand links and the same primary supply links. The ATA is a single, unified geographic area such as the same neighborhood.

* Apartment Market Area (AMA): To delineate the AMA, group together the ATA and the other competitors linked to one of the same primary demand links as the subject property. These competitors should have locations in neighborhoods similar to the subject property's neighborhood.

In addition to the competitors that have primary supply links, the analyst should also consider those apartment properties that have secondary supply links. These properties (the K properties in the illustrative scenarios) are competitive to a lesser degree. More expensive apartment projects with high vacancy rates can become more competitive in a very short time by simply reducing rents to the level of the subject property. Less expensive properties can become direct competitors by undergoing renovation and modernization. Therefore, the delineation of the AMA and ATA may have to include an analysis of those secondary supply links that could become primary supply links.

Rent Rate Adjustments

For comparable competitive properties with primary demand links, a rent rate adjustment for spatial considerations should not be necessary. These properties are in close proximity to the subject property and principal demand generator(s), and generally are in close proximity to each other. They form the ATA.

Since less competitive properties are based on a different demand generator linkage pattern and secondary supply links to the subject property, a rent rate adjustment for spatial considerations is not needed. These properties share a common demand generator, but not the whole demand generator pattern; they are spatially separated from the subject property. Rent adjustments will have to be made to these competitors. These adjustments will have to reflect commuting costs to employment sites, real neighborhood differences, and perceived neighborhood differences.

Conclusion

The literature on residential market area delineation has not provided any guidance to real estate analysts regarding the methods and procedures to use to delineate market areas. This article takes a step forward by presenting a logical process for identifying the apartment market area (AMA) and the apartment trade area (ATA). The approach used is analogous to retail and hotel market area delineation and retail trade area delineation. This article also points out that the important factors in the process of delineation: household linkage patterns, household psychographic considerations, competitive facilities and their relative locations, and both physical and psychological barriers. It provides a set of illustrations that depict the reasoning process for apartment market and trade area delineation.

Additional Reading

Allen, Marcus T., Thomas M. Springer, and Neil G. Walker. "Implicit Pricing Across Residential Rental Submarkets" Journal of Real Estate Finance and Economics 11, no. 2 (1995): 137-151.

Alonso, William. Location and Land Use: Toward a General Theory of Land Rent. Cambridge, MA: Harvard University Press, 1964.

Andrews, Richard B. "Situs: Variables of Urban Land Use Location" In Urban Land Economics and Public Policy, 31-55. New York: Free Press, Collier Macmillan Ltd., 1971.

Carn, Neil, Joseph Rabianski, Ronald Racster, and Maury Seldin. Real Estate Market Analysis: Techniques and Applications. Englewood Cliffs, NJ: Prentice Hall Publishing Co., 1988.

Evans, Alan W. The Economics of Residential Location. London: Macmillan, 1975.

Goodman, Allen C. "Housing Submarkets Within Urban Areas: Definitions and Evidence" Journal of Regional Science 21 (1981): 175-185.

Goodman, John L. "Aggregation of Local Housing Markets" Journal of Real Estate Finance and Economics 16, no. 1 (1998): 43-53.

Fisher, Jeffery D., and Robert S. Martin. Income Property Valuation. Chicago: Real Estate Education Co. (Dearborn Financial Publishing), 1994.

International Council of Shopping Centers. Research Quarterly 8, no. 2 (Summer 2001): 2.

Jones, Colin. "The Definition of Housing Market Areas and Strategic Planning" Urban Studies 39, no. 5 (2002): 549-564.

Kain, John F. The Journey to Work as a Determinant of Residential Location. P-2489. Santa Monica, CA: Rand Corp., 1961.

MacLennan, Duncan, and Yong Tu. "Economic Perspectives on the Structure of Local Housing Systems" Housing Studies 11, no. 3 (1996): 387-407.

Mills, Arlen C., and Anthony Reynolds. "Apartment Property Market Analysis" The Real Estate Appraiser (December 1991): 20-26.

Mills, Arlen C. and Anthony Reynolds. "Apartment Property Neighborhood Analysis." The Real Estate Appraiser (August 1992): 47-58.

Mills, Arlen C., and Anthony Reynolds. "Apartment Property Site Analysis" The Real Estate Appraiser (August 1991): 39-49.

Mitchell, Robert B., and Chester Rapkin. Urban Traffic. New York: Columbia University Press, 1954.

Muth, Richard F. Cities and Housing. Chicago: University of Chicago Press, 1968.

Ratcliff, Richard U. "The Locational Basis of Real Estate Value" In Real Estate Analysis, 62-80. New York: McGraw-Hill Book Co., 1961.

Rushmore, Stephen. Hotels, Motels and Restaurants: Valuations and Market Studies. Chicago: American Institute of Real Estate Appraisers, 1983.

Rushmore, Stephen, Dana Michael Ciraldo, and John Tarras. Hotel Investments Handbook. New York: Warren, Gotham and Lamont, 1997.

Schnare, A., and R. Struyk. "Segmentation in Urban Housing Markets" Journal of Urban Economics 3 (1976): 146-166.

Scottish Homes. Local Market Analysis and Planning" in Scottish Homes: A Rest Practice Guide. Edinburgh: Scottish Homes, 1993.

Scottish Office Development Department. Planning Advice Note PAN (Revised 1996) 38 Structure Plans, Housing Land Requirements. Edinburgh: Scottish Office Development Department, 1996.

Casazza, John. Shopping Center Development Handbook. 3rd ed. Washington, DC: Urban Land Institute, 1999.

Vernor, James D., and Joseph Rabianski. Shopping Center Appraisal and Analysis, Chicago: Appraisal Institute, 1993.

Wingo, Lowdon. Transportation and Urban Land. Washington, DC: Resources for the Future, 1961.

(1.) This article discusses the apartment market, which is considered a subset of the multifamily housing market even though the two terms are often used interchangeably. Multifamily housing can also include single-floor units ("apartment flats") in multistory structures that are sold as condominiums. Other forms of multifamily housing units may also exist.

(2.) In the six-step market analysis process, the first step is property productivity analysis, and that leads to the second step, which is market area delineation. Then, steps three and four are demand analysis and supply analysis respectively. The fifth step is comparison of demand and supply to determine marginal demand, and the sixth step is forecasting of the subject's market capture.

(3.) Do not interpret this example as a recommendation to use data for predetermined and possibly erroneous rings around the subject property.

(4.) Department of Housing and Urban Development, FHA Techniques of Housing Market Analysis (Washington, DC: U.S. Government Printing Office, August 1970), 15.

(5.) Ibid., 9.

(6.) D. Richard Wincott and Glenn R. Mueller, "Market Analysis in the Appraisal Process," The Appraisal Journal (January 1995): 28.

(7.) Stephen E Fanning, Terry V. Grissom, and Thomas D. Pearson, Market Analysis for Valuation Appraisals (Chicago: Appraisal Institute, 1994), 123.

(8.) Appraisal Institute, The Appraisal of Real Estate, 12th ed. (Chicago: Appraisal Institute, 2001), 164.

(9.) Urban Land Institute, "Residential Development," chapter 3 in Real Estate Market Analysis (Washington, DC: Urban Land Institute, 2002), 42. This is the same statement that appears in Urban Land Institute, "Market Analysis," chapter 2 in Apartment Housing Development Handbook (Washington, DC: Urban Land Institute, 2000), 23.

(10.) Ibid., 44.

(11.) Wincott and Mueller, 28.

(12.) Appraisal Institute, 163-164.

(13.) Ibid., 164.

(14.) Ibid., 165.

(15.) Fanning, Grissom, and Pearson, 306.

(16.) Urban Land Institute, Apartment Housing Development Handbook, 21-23; and Urban Land Institute, Real Estate Market Analysis, 42.

(17.) The mini mid-rise apartment complex is a structure of housing units constructed either above or adjacent to a parking deck. It typically has more than three floors of units (five or six floors are most typical) with elevators and internal corridors.

Joseph S. Rabianski, PhD, CRE, is a professor of real estate at Georgia State University in Atlanta. He has taught graduate and undergraduate courses in real estate appraisal and market analysis for 30 years, Rabianski is coauthor of the Appraisal Institute's first Market Analysis course, developed in 1982, and coauthor of the book, Shopping Center Appraisal and Analysis, published by the Appraisal Institute in 1993. Many of his articles have appeared in The Appraisal Journal. Contact: Department of Real Estate, Georgia State University, P.O. Box 4020, Atlanta, GA 30302-4020; T 404-651-4609; F 404-651-3396; E-mail: jrabianski@gsu.edu

Readers may contact the author for additional material discussing the issues presented here.
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Author:Rabianski, Joseph S.
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Date:Jan 1, 2006
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