Property Valuation
In Minnesota, which appraisal principle explains why a property in a declining neighborhood may sell for less than its intrinsic worth?
APrinciple of contribution
BPrinciple of regression✓ Correct
CPrinciple of anticipation
DPrinciple of conformity
Explanation
The principle of regression states that the value of a higher-quality property is adversely affected (dragged down) by being surrounded by lower-quality properties. A well-maintained home in a declining neighborhood in Minnesota will sell for less than it would in a stable or improving neighborhood due to the negative influence of surrounding properties.
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