Property Valuation
What is 'regression and progression principles' in Illinois real estate valuation?
AMathematical techniques used to calculate appreciation and depreciation rates
BThe principle that property values are affected by surrounding properties: a lower-value home is pulled up in value when surrounded by higher-value homes (progression) and pulled down when surrounded by lower-value homes (regression)✓ Correct
CStatistical methods used to calculate adjustments in the sales comparison approach
DPrinciples governing how property values change over time based on market cycles
Explanation
The principle of regression holds that the value of a higher-quality property is pulled down when surrounded by lower-quality properties. The principle of progression holds that a lower-quality property's value is pulled up by higher-quality surrounding properties.
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Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
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