Diminution in Value & Stigma
Analysis of whether an adverse condition is recognized by the market and whether any effect on marketability or value can be measured.
An adverse condition does not establish a loss in value
Three questions should be kept separate: what physical condition exists, what it costs to repair or mitigate, and how the market responds to the property before or after that work. A repair estimate answers a construction or remediation question. Diminution in value is a market question.
The analysis must determine whether informed buyers recognize the condition, whether it changes price or marketability, and whether the available evidence supports a measurable effect rather than an assumed percentage deduction.
Comparable sales are useful only if buyers knew what they were buying
A sale may not measure stigma if the condition was unknown, undisclosed, materially different, or corrected under circumstances unlike the subject. The analysis may therefore require investigation of what was known to the buyer, what would be disclosed in a hypothetical sale of the subject, and how the market responded to comparable information.
Physical correction does not automatically answer the market question
After repair or remediation, the property may return to its unaffected market position, retain a measurable residual stigma, or experience a different effect because the cure changes utility, access, or another property characteristic. The conclusion must follow from market evidence.