What effect does over-improvement have on property value?

Over-improvement can indeed decrease property value due to lack of desirability. This principle is rooted in the concept of alignment between a property's features and the expectations of the market. If a property is over-improved compared to neighboring properties—meaning it has features or upgrades that are not typical for the area—the market may not support the increased investment made in those enhancements.

Potential buyers may find the property less appealing if it deviates too much from what is customary for the area, leading to a mismatch between the property's value and buyers' perceptions. Factors such as aesthetics, functionality, and compatibility with the neighborhood play a significant role in market demand. If those improvements do not resonate with what buyers are looking for or if they exceed what the market can sustain, the overall appeal—and thus the value—of the property can diminish.

While some improvements can boost value, there is always a threshold, and exceeding this threshold through over-improvement often results in negative repercussions on marketability and property pricing.