A newly built luxury home is surrounded by several older, much smaller houses on the same block. Which appraisal principle suggests the luxury home's value may be pulled downward by its surroundings?
Correct Answer
C) Regression from inferior surroundings
Regression means the value of a superior property can be reduced by association with many inferior neighboring properties. That is why an over-improved luxury home may not realize its full potential value in a lower-priced setting.
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A modest bungalow sits on a street of much larger renovated homes that regularly sell for far more than the subject. Which principle best explains why the bungalow may be worth more than a similar bungalow in a more average setting?
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Appraiser Nina Patel is screening alternative uses for a corner parcel before concluding its highest and best use. Which of the following is NOT one of the accepted tests for highest and best use?