Nando is helping a client figure out a listing price for their home. Because supply is low and demand is high in the subject property's area, Nando suggests the home is worth closer to the top of the price range suggested by the CMA. What principle of value is at work here?

This principle asserts that a property's value is determined by the cost of acquiring a similar substitute property. While this concept is relevant in pricing strategies, it does not directly address the effects of supply and demand dynamics as seen in Nando's situation. Thus, it is not the principle at work in this context.

The principle of contribution relates to how much a particular feature or improvement adds to the overall value of a property. While this principle can influence specific pricing decisions, it does not account for the broader market conditions of supply and demand that Nando is considering.

This principle suggests that properties achieve maximum value when they conform to the standards and characteristics of their surroundings. Although conformity can impact value, it does not address the current market trends of supply and demand that are crucial to determining the listing price in this scenario.