Principle of Change (Principe d'évolution)

In the appraisal of Real Estate the principle of Change (Income Capitalization Approach) asserts that all markets are in a continual state of change. According to this principle, properties generally go through the three stages of integration (development), equilibrium (stasis), and disintegration (decline). In terms of the effects of changes on real property, ordinary physical deterioration and market demand have indicated four stages through which an improved property will pas: growth, when improvements are made and property demand expands; equilibrium or stability, when the property undergoes little change; decline, when the property requires an increasing amount of upkeep to retain its original utility while demand slackens; and revitalization or rehabilitation, which may occur if demand increases, serving to stimulate property renovation. This principle also applies to an entire neighborhood.