Which principle states that maximum value is realized when there is harmony in the neighborhood?

The principle that states maximum value is realized when there is harmony in the neighborhood is indeed the Principle of Conformity. This principle highlights the idea that properties tend to gain in value when they conform to the surrounding properties in terms of use, design, and overall character. When a property is in a neighborhood where properties are similar in style, size, and function, it tends to have a higher market value due to the desirability created by this uniformity. Buyers are generally more attracted to neighborhoods where homes are consistent, leading to enhanced overall property values.

Conformity plays a crucial role in real estate valuation because it underscores the importance of the surrounding environment on an individual property's worth. Properties that deviate significantly from what is typical in their area may experience diminished value, emphasizing the impact of neighborhood harmony on real estate markets.