Property Valuation
The 'principle of regression' in real estate valuation holds that:
AA. Older properties always decline in value
BB. A high-value property surrounded by lower-value properties will be pulled down in value✓ Correct
CC. Property values always return to historical averages
DD. Regression to the mean applies only to commercial properties
Explanation
The principle of regression states that a higher-value property (over-improvement) located among lower-value properties will tend to have its value negatively affected by the surroundings. This is why appraisers look for conformity.
Related Georgia Property Valuation Questions
- When performing a comparable market analysis (CMA), a Georgia agent should select comparables that:
- In a comparative market analysis (CMA), when a comparable property has a feature the subject property lacks (e.g., a pool), the appraiser/agent should:
- The land residual technique in appraising is used when:
- Which of the following would be considered an arm's-length transaction for comparable sales purposes?
- In the cost approach, the 'site value' is estimated as if the land were:
- A 'before and after' method is used in appraisal when:
- In a seller's market, cap rates for investment properties tend to:
- A Georgia property has an annual NOI of $54,000 and a capitalization rate of 6%. What is the estimated value?
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