A single family dwelling valued at $200,000 in a neighborhood with sales between $175,000 and $225,000 illustrates which principle?

The principle illustrated by a single-family dwelling valued at $200,000 in a neighborhood with sales ranging between $175,000 and $225,000 is conformity. This principle suggests that a property's value is maximized when it conforms to the standards, characteristics, and expectations found within its surrounding neighborhood.

In this case, the dwelling's value aligns well with the sales prices in the vicinity, indicating that it fits within the established range of property values for similar homes in the area. This reflects the idea that homes that closely match their neighbors in size, style, and amenities are likely to support one another in terms of value. This principle is fundamental in appraisals, as it helps to justify a property's valuation based on how well it conforms to local market standards.

The phenomenon of conformity ensures that properties don't deviate significantly in value from those around them unless there are unique circumstances affecting the property itself. This highlights the importance of neighborhood dynamics in real estate valuation.