What principle underlines that the characteristics of a property should satisfy market expectations?

The principle of conformity pertains to the idea that a property’s value is enhanced when it aligns with the expectations and characteristics that buyers and investors find desirable in a given market. This principle suggests that properties are more likely to achieve their highest market value when they possess features and attributes that are consistent with similar properties in the area, such as size, design, and amenities.

When a property conforms to the norms and preferences of the market, it becomes more appealing to potential buyers, thereby boosting its desirability and, consequently, its value. This principle recognizes that properties that are drastically different from their neighbors or from market expectations may struggle to sell or may do so at a reduced price, as they do not meet the typical criteria that buyers are looking for.

In contrast, the other principles address different aspects of real estate valuation: return on investment relates to the profitability of a property, substitution involves the concept that buyers will not pay more for a property than they would for an equivalent substitute, and highest and best use refers to the optimal use of a property that maximizes its value. Each of these principles plays a vital role in real estate, but conformity specifically underscores the importance of meeting market expectations for property characteristics.