Principle of Conformity
The principle that property values are supported when properties in an area are reasonably similar in use, style, and value. Maximum value tends to occur where a property conforms to its surroundings — the reasoning behind over- and under-improvement penalties.
Related Terms
Over-Improvement (Superadequacy)
An improvement that exceeds what the neighborhood supports — the $400,000 kitchen in a $350,000 market.
Underimprovement
An improvement below the level the site and neighborhood would support — a modest cottage on an estate lot.
Neighborhood Analysis
The appraiser's evaluation of the area surrounding the subject property, including property values, market trends, land use, demographics, and external factors that influence value.
More in Market Analysis
View allMarket Conditions
The current state of supply and demand in the real estate market for a particular property type in a defined area.
Absorption Rate
The rate at which available properties are sold or leased in a specific market during a given time period.
Days on Market (DOM)
DOMThe number of days between when a property is listed for sale and when it goes under contract.
Months of Supply
The estimated time it would take to sell all current listings at the current sales pace, calculated by dividing active inventory by the average monthly sales rate.