How is "market value" commonly defined?

Market value is commonly defined as the price at which a property would sell under typical conditions, which reflects the value determined by the current real estate market. This definition takes into account various factors including the location, condition, and comparable sales in the area, as well as the forces of supply and demand that affect pricing.

Unlike other definitions that focus solely on original purchase price, future estimates, or historical values, market value emphasizes the idea of a fair market transaction occurring between a willing buyer and a willing seller in the absence of undue pressure. This concept is critical for appraisals, transactions, and understanding the real estate market dynamics. Understanding market value helps stakeholders make informed decisions based on realistic expectations of property sales in the current market environment.