A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase in some future time. This is an example of the principle of?

This situation illustrates the principle of anticipation, which suggests that the value of property is influenced by the expected future benefits or uses that may occur. In this case, the couple is aware that their older home is in a neighborhood transitioning to commercial use. They anticipate that this change will lead to an increase in the value of their property over time due to the demand for commercial space in the area.

Understanding anticipation in real estate highlights how future events, such as changes in zoning, economic development, or neighborhood revitalization, can affect property values. This principle underlines the notion that buyers are often willing to pay a premium for properties based on what they believe will happen in the future, rather than solely on current conditions.

The other concepts, while related, do not fully capture the essence of this scenario: expectation is more general and doesn’t specifically tie to property values; appreciation focuses on the increase in value over time without necessarily involving future events; and speculation tends to imply higher risk and uncertainty, which doesn't align with the couple's more grounded anticipation of value increase due to clearly observed changes in their neighborhood.