The Principle of conformity states that conformity is achieved when all the entities or objects comply to the same standard, rules or laws. This creates a balance and stability between entities that are subjected to the same environment.
In real estate the principle of conformity has to do with all the property in a neighborhood that comply with the same architectural standard and design. A home that is not conform is a house that has a design or structure that is different from the other homes which can cause a depreciation in value. On the other hand if a house adheres to the same style and design of the houses around it it will increase in value as a result.
The real estate market in many places suffers for not having a sense of conformity. This usually occurs in areas that are underdeveloped where people buy vacant lots. People have different ideas on what the property should look like based on taste and budget. This creates a mixture of properties with different styles and design, thus hurting the value.
For example if you have a four-story house located in a neighborhood of single-family homes, the four-story houses value would go down. An increase would only occur if the four-story house was placed in a neighborhood of similar homes.
Same principles apply in commercial real estate, in order to generate more sales. For example, the same type stores that provide similar services are strategically placed in the same area.
Most malls have a specially designated area only for food stores, and we see clothing stores placed one after another. Around the city you might see clothing stores located one near the other, and the same applies for food or other stores that provide different services.