Which principle of value applies when comparing a $175,000 house with a $75,000 house?

The principle of value that applies when comparing a $175,000 house with a $75,000 house is based on the concepts of progression and regression. Progression refers to the phenomenon where a property of lesser value appreciates in value due to the presence of more expensive properties in the surrounding area, whereas regression is the inverse situation, where a more expensive property may lose value because of lower-priced properties nearby.

In the given scenario, the comparison between the two houses indicates an examination of how their values may influence or relate to one another within the market context. For example, the $175,000 house might maintain or gain value due to the presence of more expensive homes in the area, while the $75,000 house may appreciate if it is situated near this higher-valued property, illustrating the principle of progression.

Understanding these principles helps in assessing the influences on property values in a particular market and aids in determining how various properties relate in terms of their worth based on their surroundings.