What is meant by market value in real estate?

Market value in real estate refers to the expected value of a property based on what it would likely sell for in the current market under normal conditions. This concept encompasses factors such as the property's location, condition, and comparable sales in the area, providing an estimate of the property’s worth as determined by supply and demand dynamics.

It reflects the price that a willing buyer would pay to a willing seller when neither is under duress to transact. This is distinct from emotional value, which may not accurately represent true financial worth, historical cost, which refers to what the property initially cost in the past, and insurance claim values, which relate to the monetary amount a property owner might receive in the event of a loss. Thus, the expectation of current market conditions and buyer behavior is key in establishing market value.