Property Valuation
The concept of 'regression' in real estate appraisal means:
AA decline in property values across an entire market
BThe value of a superior property is diminished by its association with inferior surrounding properties✓ Correct
CThe value of an inferior property is increased by proximity to superior properties
DA reduction in appraised value due to functional obsolescence
Explanation
The principle of regression holds that a higher-valued property located among lower-valued properties will be pulled down in value. Its counterpart, progression, holds that an inferior property gains value when surrounded by superior properties. These principles affect optimal property improvements and neighborhood analysis.
Related California Property Valuation Questions
- External obsolescence (economic obsolescence) is caused by:
- The principle of progression in real estate means:
- External obsolescence (economic obsolescence) differs from other depreciation types because it is:
- Functional obsolescence refers to:
- An appraiser uses the 'before and after' method when appraising property affected by:
- A property generates an NOI of $60,000. Comparable properties sell at a 5% cap rate. What is the indicated value using the income approach?
- A property generates a net operating income of $50,000 and is valued using a 5% cap rate. What is the estimated value?
- When using the sales comparison approach, which of the following properties would typically be selected as a comparable sale?
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