Which appraisal principle suggests that a property’s value increases with improvements in the surrounding area?

The principle that suggests a property’s value increases with improvements in the surrounding area is known as the principle of progression. This principle states that the value of a property can be positively influenced by the presence of higher-valued properties nearby. When surrounding properties are upgraded or developed, it tends to enhance the desirability and marketability of nearby real estate, thereby raising their value.

Understanding this principle is essential for real estate professionals, as it highlights the importance of neighborhood dynamics in property valuation. For instance, if a community sees new parks, shopping centers, or higher-end homes being built, properties within that community may experience an increase in value as a result of these improvements. This highlights the interconnectedness of property values within a locality and can serve to guide investment decisions or development planning.

The remaining principles, while relevant to real estate appraisal, do not focus on the effects of surrounding improvements on property value but rather address other dynamics of value related to market tendencies and property characteristics.