The concept of 'substitution' implies that if two properties are identical, what will determine which has more value?

The principle of substitution states that the value of a property is determined by the cost of acquiring a similar or identical property. When two properties are identical, the one that commands a higher price must be more desirable or have some other factor that justifies the increased value. In this case, price becomes the deciding factor.

This concept is grounded in the marketplace and serves as a foundation for real estate valuation. If two properties are indeed the same in features, size, and condition, the market price sets apart one from the other. Therefore, the market competition and the willingness of buyers to pay a certain price play a pivotal role in establishing the perceived value of that property.

Location, condition, and size can influence value, but when comparing identical properties, the primary determinant of value becomes their market price. Thus, it's the price that ultimately reflects the property’s desirability and value in that specific context.