Which value is considered in determining fair market value?

The determination of fair market value is significantly guided by current market trends. Fair market value is defined as the price that a property would sell for on the open market under normal conditions, where both the buyer and seller are informed and willing participants. Current market trends reflect the forces of supply and demand, economic conditions, and buyer preferences, all of which help to establish what a reasonable price would be for a property at a given time.

In this context, trends such as the overall economy, interest rates, and local real estate market dynamics can heavily influence property values. For instance, if there is a high demand for homes in a specific area with limited supply, prices tend to rise accordingly. This understanding is essential for appraisers to accurately assess and determine fair market value based on the most recent data available.

While emotional value to the owner, replacement cost, and appraised value from previous sales might influence an individual's perspective on a property's worth, they do not reflect the current transactional realities of the market. Emotional value is subjective and varies significantly among different owners, while replacement cost pertains to the expenses required to replace the property, which may not align with market desires. Similarly, appraised values from past sales might not be current indicators if significant market changes have