Which analysis focuses on comparing similar properties to assess value?

The sales comparison approach is the correct choice because it specifically emphasizes the evaluation of similar properties to determine their market value. This method relies on the principle of substitution, which posits that a buyer will not pay more for a property than what they would pay for a comparable property with similar characteristics.

In practice, this approach involves gathering data on properties that have recently sold in the same area and are comparable in terms of size, location, condition, and features. By analyzing these sales, appraisers can establish a value estimate for the property in question based on the prices that similar properties have commanded in the market.

This method is particularly effective in active real estate markets where there are ample sales of comparable properties, allowing for a robust comparison. It directly ties into how market dynamics influence property values and provides a clear framework for assessing worth based on real-world transactions.

The other options, while relevant in the context of property valuation, do not focus specifically on comparison of similar properties. The cost approach, for instance, estimates value based on the cost to replace or reproduce the property, while the income approach assesses property value based on the income it generates. Market analysis is broader and encompasses various factors influencing market trends rather than strictly comparing similar properties.