valuation

regression

Regression is the appraisal principle that the value of a higher-quality property is reduced by being located among lower-quality properties. It is the opposite of progression, in which a lesser property gains value from nearby better properties. Regression explains why over-improving a home relative to its neighborhood often fails to return the full cost of the improvements.

Exam tip
Regression: the best house on the block loses value. Progression: the worst house on the block gains value. Exams often flip these.
Example
A $900,000 custom home built in a neighborhood of $350,000 houses appraises for far less than its construction cost because of regression.

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Last verified: 2026-10-23