What is the key factor in determining the value of a property, according to the principle of progression?

The principle of progression states that the value of a property is positively influenced by the values of surrounding properties, particularly those that are of higher quality or value. In simpler terms, when a less expensive home is located in a neighborhood of more expensive homes, its value may increase due to the higher average values of its neighbors. This principle is rooted in the idea that buyers are willing to pay more for a property if it is surrounded by other properties that are more valuable, reflecting the desirability of the area.

This concept emphasizes the significance of the neighborhood and the immediate environment over individual property characteristics such as condition, size, or age. While those factors can influence value, they are considered less impactful when compared to the influence of surrounding properties. For instance, a well-maintained, good-sized home in a high-value area could be worth significantly more than a similar home in a low-value area, demonstrating the power of progression in property values.