Which of the following phases is characterized by a downturn in property values?

The phase characterized by a downturn in property values is decline. During this stage, economic factors such as increased vacancy rates, reduced demand, or declining neighborhood conditions contribute to a significant reduction in property values. This decrease can be influenced by various issues including excessive inventory of properties, shifts in population, or changes in the local economy that adversely affect real estate desirability.

The decline phase stands in contrast to growth, where property values are rising; stability, where property values have leveled off; and revitalization, which involves improvements and investments that boost property values after a period of decline. Understanding the characteristics of different market phases is crucial for appraisers and investors as it helps assess market trends and make informed decisions.