Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

A shortage of homes in desired areas has what effect on home values?

No change
Decrease
Increase
Fluctuate wildly

The correct answer is: Increase

When there is a shortage of homes in desired areas, home values will increase. This is because the demand for homes is high, but the supply is low. This creates a competitive market, driving up the prices of homes in these areas. Option A is incorrect because there is a change in home values. Option B is incorrect because home values would not decrease in a market with high demand. Option D is incorrect because while home values may fluctuate in general, the trend would be an overall increase due to the shortage of homes in desired areas.