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!

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What is a consequence of unbalanced property values in a neighborhood according to the balance principle?

Increased supply of homes
Decreased demand for homes
Disruption in property value harmony
Stabilization of market prices

The correct answer is: Disruption in property value harmony

Having unbalanced property values in a neighborhood can lead to a disruption in property value harmony, which in turn can cause various consequences such as decreased demand for homes and increased supply of homes. This is because buyers may gravitate towards neighborhoods with more consistent and stable property values, making it harder for sellers in a neighborhood with unbalanced values to find potential buyers. Additionally, a fluctuation in property values can also create uncertainties and risks for potential buyers, resulting in decreased demand and potentially leading to a stabilization of market prices. Therefore, it is important for property values to be balanced in a neighborhood in order to maintain a harmonious and desirable real estate market.