Final answer:
The appraiser likely used the principle of conformity, which affects a home's appraised value by comparing it to other homes in the same area. Unique features that make a house stand out may not increase its value if it does not conform to what is typical in the neighborhood. Therefore, the correct Option is a).
Step-by-step explanation:
In the scenario where the big white house on the hill did not appraise for the expected value, the principle applied by the appraiser was likely that of conformity. The principle of conformity suggests that a house that is significantly different from others in its area may not be valued as highly because it does not conform to the expectations of the typical buyer in the subdivision. The principle of conformity is crucial in real estate appraisal as it reflects the idea that properties more similar to each other in a certain area tend to hold their value better than those that are overly distinctive or non-conforming.
This principle explains why the unique features, like extra rooms, a double lot, and larger garage, did not necessarily translate to a higher value in the eyes of the appraiser. The house's lack of conformity affected its demand among potential buyers who were looking for homes within this specific subdivision's standard and expectations. Other contributing factors related to the housing market are highlighted in the provided references, such as the impact of racial segregation in postwar suburban development, the influence of economic indicators and government policy on home loans availability, and the role of rational expectations in immediate price adjustments. These factors also play a role in determining the value of housing within a given market, alongside principles like conformity.