Which of the following describes geographical stratification in location analysis?

Geographical stratification in location analysis is accurately described by identifying market areas and neighborhoods. This approach involves segmenting a larger geographical region into smaller areas based on various attributes such as demographics, real estate trends, and economic conditions.

By focusing on specific market areas and neighborhoods, appraisers can better understand localized dynamics that affect property values and demand. This ensures that the analysis considers unique factors pertinent to those areas, leading to more accurate and relevant appraisals. Understanding these localized characteristics is crucial for effective mass appraising, as property attributes and buyer preferences can vary significantly from one region to another.

In contrast, other options do not encompass the concept of geographical stratification effectively. Grouping properties by sales price, combining all properties into one category, or analyzing property characteristics in isolation would not consider the spatial factors that can have a strong impact on pricing and valuation. These approaches are more generalized and do not reflect the nuanced understanding that geographical stratification provides.