====== Appreciation (Real Estate) ======

**Appreciation** is an **increase in the value** of real property over time due to economic, physical, or market-related factors.

===== Key Characteristics =====
  * Refers to an **increase in market value**
  * Can be **natural (market-driven)** or **forced (value-added improvements)**
  * Affects both **land and improvements**
  * Opposite of **depreciation**
  * Often occurs over the **long term**, but can fluctuate

===== Types of Appreciation =====
  * **Natural Appreciation**
    * Caused by market forces beyond the owner’s control
    * Examples: population growth, job growth, low interest rates, inflation

  * **Forced Appreciation**
    * Caused by actions taken by the property owner
    * Examples: remodeling, renovations, added units, zoning changes

===== Factors That Influence Appreciation =====
  * Location and neighborhood desirability
  * Supply and demand
  * Interest rates
  * Economic conditions
  * Infrastructure improvements (transportation, schools, amenities)

===== Exam Tip =====
  * Appreciation increases **market value**, not necessarily **assessed value**
  * Appreciation is **not guaranteed** and can reverse during market downturns