What principle explains how the value of a property is influenced by the values of neighboring properties?

The principle of progression explains how the value of a property is positively influenced by the values of neighboring properties. This concept suggests that if a property is situated among higher-value homes, it may benefit from their desirability and overall appeal, resulting in an increase in its own market value. Essentially, the surroundings can enhance the perceived value of the property due to the aggregated attractiveness and quality of the neighborhood.

This principle is particularly relevant in real estate, as buyers are often willing to pay more for properties located in desirable areas. When similar properties nearby sell for higher prices, it can lead to a rise in property values across the board, improving the investment potential for homeowners in that area.

In contrast, options like regression indicate a decrease in value due to the presence of lower-valued properties surrounding a given home, which would not apply to the context of the question. The concepts of supply and demand and market value provide broader frameworks for understanding real estate valuation but do not specifically address the direct correlation between a property's value and the values of its neighbors, as progression does.