Market Value refers to the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus.
It represents an unbiased estimate of the potential sales price of a property, taking into consideration factors such as location, condition, improvements, neighborhood trends, and market demand. Market value can be influenced by both macroeconomic indicators, such as interest rates and economic growth, and microeconomic factors, such as the property’s unique characteristics.
The market value is often determined by a licensed appraiser who will use various methods such as comparable sales, income approach, and cost approach to arrive at an estimate. It’s essential for various aspects of real estate investment, including buying, selling, financing, and taxation, and is a crucial concept for investors, lenders, and regulators alike.