Property Valuation
What does 'progression' mean in Hawaii real estate appraisal?
AA. The gradual increase in property values over time in a growing market
BB. The principle that a lower-value property may have its value increased by being near higher-value properties✓ Correct
CC. Depreciation shown as a downward progression on the cost approach
DD. The sequential steps in the appraisal process
Explanation
The principle of progression holds that a lower-value property surrounded by higher-value properties tends to have its value increased toward the level of the surrounding properties.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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