Property Valuation
What is 'over-improvement' and how does it affect property value?
AAdding too many features to a property always maximizes its value
BImproving a property beyond what the market supports for the neighborhood, resulting in the cost of improvements exceeding the value added (negative contribution)✓ Correct
CA property that has been improved more than once
DA government finding that a property has been over-developed
Explanation
Over-improvement (super-adequacy) occurs when improvements are added that exceed what the market in that area will support. For example, building a $100,000 addition in a neighborhood where similar homes sell for $300,000 may not add $100,000 in value — the principle of regression limits the added value.
Related California Property Valuation Questions
- What is a 'comparable sale' (comp) in real estate appraisal?
- What is 'regression' as an appraisal principle?
- What is 'assessed value' and how does it relate to market value in California?
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