What principle affects the value of a single-family home in an industrial area?

The principle that affects the value of a single-family home in an industrial area is conformity. This principle suggests that a property’s value is influenced by the standards and characteristics of surrounding properties. When a residential property is located in an industrial area, its value may decrease compared to similar homes in residential neighborhoods due to a lack of conformity with the prevailing land use.

Industrial areas are typically characterized by factories, warehouses, and commercial activities, which do not align with the expectations of residential living, such as quietness, aesthetics, and community standards. Therefore, a single-family home in such a setting would struggle to maintain value as it deviates from the expected norm of residential properties, leading to the principle of conformity being a significant factor in determining its market value.

The other options, while relevant in different contexts, do not directly apply to the specific situation of a single-family home situated in an industrial zone. Diminishing returns typically pertains to investments and improvements beyond a certain point not resulting in proportional value gains. Contribution relates to how much a specific feature adds to the overall value of a property, which is less relevant when considering the broader context of land use mismatch. Competition generally refers to market dynamics in terms of supply and demand but does not specifically address