Property Valuation
What is a 'regression' appraisal principle and how might it affect Nevada properties?
AA statistical method replacing traditional comparables analysis
BThe principle that a higher-value property's value is pulled downward (regressed) by proximity to lower-value properties — an expensive home in a declining neighborhood will be worth less than the same home in a stable neighborhood✓ Correct
CA tax reassessment reducing a Nevada property's assessed value
DThe natural decrease in land value over time due to Nevada's growth patterns
Explanation
The principle of regression holds that lower-quality properties in the area reduce the value of higher-quality properties. An overimproved property (the most expensive home on the block) will be worth less than if it were in a neighborhood of comparable homes. In Nevada, during and after the 2008-2012 housing crisis, pockets of foreclosed/vacant homes dragged down nearby values — demonstrating regression. Nevada agents should consider surrounding property values when advising clients on improvements and pricing.
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