What does the term ‘conformity principle’ imply in property assessment?

The 'conformity principle' in property assessment suggests that properties within a neighborhood should maintain similar market values. This principle is grounded in the idea that the value of a property is influenced by the characteristics and values of surrounding properties. When homes or buildings in close proximity share similar features, styles, and market values, it creates a sense of uniformity that typically stabilizes and often enhances property values in that area. Thus, the market tends to support similar valuations across comparable properties, emphasizing that a property's value can be impacted by its relationship to neighboring properties.

Maintaining this conformity helps ensure that property assessments remain fair and reflective of the local market conditions. Adherence to the conformity principle can reinforce community aesthetics and promote stability within the real estate market by preventing drastic disparities in property values among adjacent properties.

Other options do not align with the essence of the conformity principle; for example, valuing properties solely on size does not account for factors like location, market trends, and condition. Appraising properties at their highest potential value overlooks the importance of current market conditions and comparability among other similar properties. Lastly, the idea that properties must match the style of adjacent real estate does not encapsulate the broader market value relationships the conformity principle addresses.