What is the definition of "market value" in real estate?

The definition of "market value" in real estate is best captured by the estimated price a property would sell for in a competitive market. This definition reflects the fundamental principle that market value is determined by the dynamics of supply and demand, rather than the personal costs associated with purchasing or improving a property.

Market value represents what a buyer is willing to pay and what a seller is willing to accept in an open and unrestricted market, given adequate exposure and the time to make informed decisions. It is not merely what has been spent (such as total costs or renovation expenses) or what a seller desires. Instead, it is a function of comparable properties, market trends, and economic conditions influencing buyer perceptions and willingness to engage in a transaction. This makes it an essential concept for appraisals, sales negotiations, and investment decisions in real estate.