Which term describes the effect of a nearby superior property on the value of lesser properties?

The term that accurately describes the effect of a nearby superior property on the value of lesser properties is regression. This concept refers to the phenomenon where the presence of a higher-quality property—such as a luxury home—can negatively affect the perceived value of surrounding, less desirable properties. In the context of real estate, when properties in a neighborhood are of varying qualities, the poorer properties can be perceived to decline in value due to the proximity to the more valuable property. This often happens because potential buyers may focus on the superior property's higher value, leading to a perception of diminished worth in the lesser properties.

Plottage refers to the increased value that can result from combining two or more parcels of land into a single, larger parcel. Substitution is the principle that an informed buyer will purchase a property based on the costs associated with obtaining a similar property in the same market, suggesting that a buyer will not pay more for a property than they would for a comparable one. Assemblage involves the process of combining neighboring parcels of land to increase their value collectively, which can lead to a higher return on investment when developed.

In the context of the question, regression explicitly addresses the influence of a superior adjacent property on the valuation of the lesser ones.