Bracketing groups historic sales by year and tracks how prices have changed over time. The result is a defensible market conditions rate of change. This problem requires judgment — there is no single correct answer. Different appraisers may justify different rates depending on which group-pair they emphasize.
Problem
Visualize the trend
Step-by-step solution
Solution Roadmap
Flowchart for Solving This Market Conditions Problem
1 · Group the Sales by Time
The sales are split into time-period groups (older to more recent). The goal is to measure how land prices moved over time.
2 · Average Each Group
Compute the average sale price within each time group, so each period has one representative figure.
3 · Find the Annual Rate of Change
Between consecutive group averages, compute the percent change per year: (Newer − Older) ÷ Older, spread over the time between them.
4 · Choose the Market-Conditions Rate
Bracket the candidate rates and pick a defensible one — most recent, average, or most conservative — to time-adjust the comparables.
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Appraisal Toolbox
Floor Area Ratio (FAR)
The floor area ratio (FAR) is the ratio of the gross building area (all floors combined) to the area of the site on which the building sits. It is one of the primary measures of building density used in zoning and land use analysis.
The formula is: FAR = Total Building Floor Area ÷ Site Area. A FAR of 1.0 means the gross building area equals the site area; a FAR of 2.0 means the building floor area is twice the site area. Higher FAR values typically indicate denser, more intensive land use.
When the FAR and the building’s coverage ratio (footprint ÷ site) are both known, the number of stories can be estimated as FAR ÷ Coverage Ratio. This is useful for understanding how a given allowable density translates into building height/stories given a particular footprint.
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Video Explanation Available
Visit our YouTube channel for a brief video presentation of floor area ratio.