What concept describes the notion that lesser quality properties benefit from higher quality properties nearby?

The concept that describes how lesser quality properties benefit from having higher quality properties nearby is known as progression. Progression suggests that the value of a less desirable property can be positively affected by its proximity to more expensive, higher quality properties. This phenomenon occurs because the presence of higher quality homes or commercial properties tends to elevate the perceived value of the surrounding area and, consequently, the lesser properties within that vicinity.

In real estate, this principle can be crucial for investors and buyers who are considering properties in varied neighborhoods. If a buyer is looking at a home that has some limitations but is located near upscale homes, the potential for appreciation increases due to the influence of those neighboring properties. This can be an important consideration in market analysis and property valuation.

The other options pertain to different real estate concepts. Regression deals with the idea that more valuable properties can be negatively impacted by the presence of less desirable properties. Obsolescence refers to a decrease in property value due to outdated features or conditions. Substitution is the principle that a buyer will consider similar properties when determining a reasonable price, which does not specifically pertain to the positive effects of surrounding higher quality properties. Understanding progression helps in identifying opportunities in real estate investments where location dynamics come into play.