Property Valuation
What is 'regression' and 'progression' in real estate value theory?
AA. Statistical methods for analyzing real estate price trends
BB. Regression: a superior property loses value when surrounded by inferior properties; progression: an inferior property gains value when surrounded by superior ones✓ Correct
CC. The depreciation of value over time due to physical deterioration
DD. The process of adjusting comparable sales up or down for differences
Explanation
The principles of regression and progression describe how surrounding properties affect a subject's value. Regression: over-improving for the neighborhood reduces return (the mansion surrounded by modest homes). Progression: an inferior property benefits from association with superior neighbors. These principles guide buyers and sellers in Hawaii's diverse neighborhoods.
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