Virginia Real Estate Exam Practice Question
When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle of value is this?
Correct Answer: D
Rationale: The principle of regression explains how the value of a higher-quality property can decrease when it is situated next to a lower-quality property. This occurs because buyers may perceive the overall neighborhood as less desirable.
Anticipation relates to expected future benefits, which doesn't address the immediate impact of neighboring properties. Contribution refers to how much a specific feature adds to a property's value, not the influence of surrounding properties. Progression suggests that lower-quality properties can increase in value due to proximity to higher-quality ones, which is the opposite of what occurs in this scenario.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now