Which principle suggests that a property's value is determined by its comparable alternatives?

The principle that suggests a property's value is determined by its comparable alternatives is the Principle of Substitution. This principle states that the maximum value of a property is influenced by what it could be exchanged for in the market. Essentially, if two properties are similar in utility, location, and other factors, the value of one property will generally be limited by the value of the other comparable property.

This principle operates on the concept that buyers will not pay more for a property than they would for an equally desirable substitute in the same market. Therefore, if a buyer finds a similar property at a lower price, they are unlikely to pay more for the property in question. This helps ensure that pricing remains competitive and reflects the market's conditions.

The other principles, such as market analysis and utilization, relate to broader methods and approaches for assessing property values but do not specifically focus on the idea of equivalency in value based on comparable alternatives. Appraisal value is a determined figure based on various methodologies, but it does not encapsulate the specific concept of substitution as a way to gauge value in relation to similar properties.