California Real Estate Practice Exam

In an area with heavy bonded indebtedness and high property taxes, what might an appraiser conclude?

1. Large investors would be attracted to the area

2. New construction and general industry would tend to leave the area

3. There would be a good market for street bonds

4. There would have to be better schools and services in the area

The correct answer is: Large investors would be attracted to the area

In an area with heavy bonded indebtedness and high property taxes, an appraiser might conclude that large investors would be attracted to the area. This is because high property taxes and bonded indebtedness can indicate that there is funding available for infrastructure and community development projects. Large investors may see this as an opportunity for potential growth and return on investment in the area. The other options are incorrect because: - Option B implies that new construction and general industry would tend to leave the area, which is not necessarily true in every case. - Option C suggests that there would be a good market for street bonds, but this does not directly relate to the attractiveness of the area to large investors. - Option D states that there would have to be better schools and services in the area, but this is not a conclusion that can be directly drawn from heavy bonded indebtedness and high property taxes.