What principle suggests that similar properties in the market result in lower prices?

The principle that suggests that similar properties in the market result in lower prices is based on the concept of competition. When multiple properties of similar characteristics are available within a given market, buyers have options to choose from. This abundance of choices allows them to compare prices and features, leading sellers to adjust their pricing strategies to remain competitive. As a result, if one property is priced significantly higher than others with comparable features, buyers are likely to opt for the less expensive alternatives. Hence, the presence of competition among similar properties can drive prices down, reflecting the market's supply and demand dynamics.

Conformity focuses on how properties tend to be valued based on their similarity to other properties in the area rather than price competition. Contribution relates to how specific improvements contribute to a property's overall value, while plottage deals with the increased value of combining multiple parcels of land. Each of these principles offers insights into real estate valuation, but competition directly addresses how market pricing is influenced by the availability of similar properties.