In real estate appraisal, what does "site value" refer to?

Site value refers to the worth of the land itself, independent of any structures or improvements that may be built on it. This concept is fundamental in real estate appraisal, as it provides a baseline value for the property in its raw form, allowing appraisers and investors to assess the potential of the land for various uses, such as residential, commercial, or industrial development.

Understanding site value is important because it gives insight into what the land can be worth if developed, how it compares to similar parcels, and how location influences value. This understanding is pivotal for making informed decisions regarding purchasing or developing land.

The other options touch on related concepts but do not accurately define site value. For example, market value encompasses both the land and any structures present, while development costs refer to expenses associated with bringing a piece of land to a usable state. Therefore, focusing exclusively on the land’s worth before any construction—site value—provides clarity on its potential for future development.