What does the Principle of Balance state?

The Principle of Balance emphasizes that the value of real estate is influenced by the equilibrium achieved between various uses of land and the amenities available in a certain area. This principle reflects how a well-balanced mix of residential, commercial, and public spaces contributes to a community's overall attraction and functionality, ultimately enhancing property values.

When different land uses are in proportion and appropriately located, this balance supports efficient land utilization and access to necessary services and amenities, thereby maintaining or even enhancing the value of properties. For example, if an area has too much commercial development and not enough residential or green spaces, it may detract from the quality of life, leading to a potential decrease in property values. Conversely, a harmonious layout that incorporates various essential uses can enhance desirability, leading to increased property values.

This principle is foundational in real estate appraisal because it highlights the importance of maintaining an optimal relationship between different types of property use, which can inform appraisers' assessments and conclusions about value within a community or market setting.