According to the principle of progression, how do lower-value homes generally behave when situated near higher-value homes?

The principle of progression states that the value of a lower-value property can be positively influenced by the presence of higher-value homes in the same area. This is based on the idea that a desirable neighborhood is often characterized by a mix of property values, with higher-quality homes setting a standard that can elevate the perceived value of nearby lower-value homes.

When lower-value homes are located near higher-value homes, potential buyers often see the area as more desirable due to the presence of attractive properties and well-maintained neighborhoods. This desirability can lead to increased demand for the lower-value properties, resulting in an appreciation of their market value over time. Buyers are generally willing to pay more for a property that is part of a thriving and upscale community, which supports the favorable impact on the value of the lower-value homes.

In summary, the correct understanding reflects the positive influence that the presence of higher-value homes has on the market value of lower-value properties due to perceptions of desirability and overall neighborhood enhancements.