Under the Principle of Regression, which scenario is least likely to represent good value?

• A. Owning the largest house on the block
• B. Owning a moderately sized, well-located house
• C. Owning a modest house in a high-demand area
• D. Owning a home with typical features for the neighborhood

Answer: (A)

Under the Principle of Regression, values tend to move toward the average for the neighborhood; buyers don’t pay a premium for features that are out of step with what the area generally offers. The largest house on the block is typically over‑improved for that location, so even with more space, it doesn’t command a proportionate market premium. Its price and value are pulled back toward the neighborhood norm, making it the least likely to represent good value. The other scenarios align with what buyers in that neighborhood expect—moderate size in a good location, a modest home in high demand, or a home with typical features—so they fit better with the surrounding value.