What could result from the appraisal principle of competition?

The appraisal principle of competition suggests that when there are multiple properties available in a market, and they are similar in characteristics, this competition can drive up property values. As more properties compete for buyers, sellers may price their homes more strategically, which can lead to higher selling prices. This principle is grounded in the basic economic concept of supply and demand—when demand for comparable properties remains strong, and competition is fierce, values tend to rise due to the bidding processes and consumer interest in the market.

In this scenario, higher property values reflect the effect of competition among sellers aiming to attract buyers, which can create a bidding war or increased offers, thereby enhancing the overall worth of properties in that market area.

The other potential outcomes, such as increased property taxes or changes in market supply and demand, may also be influenced by competition to some extent, but they do not directly represent the core effect of competition on property valuation itself.