how the price of a property or piece of land is determined
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Property and/or land value is determined, like most everything else, by how much someone is willing to pay for it.
In a free market economy, like the US, prices are determined by supply and demand or what is know as market price. You can see this in a smaller scale in sites like ebay, where people can post things for sale at whatever price they want but success is determined by the market price. For example, I have a comic book I want to sell. I list it at $500, but there are 10 other copies list for $200. Will my comic sell for $500 or is it more likely that the $200 ones will sell first. Thus the market price and actual value is somewhere closer to $200. Now of course things like condition come into play,, as they would in real estate, but my price would still have to be comparable to the other listings. Maybe $250 or $300 if mine was in better condition.
Same rules apply to real estate. You have an acre of land to sell and you list it for a million dollars. Meanwhile there are 10 other plots of land in the same area about the same size being listed and sold for $100,000. Is you land worth 1 million or somewhere closer to $1,000?
Taking it a step further, let’s say you list you land for $100k as well, but let’s say that there is no well source for water on that land. Would people still be willing to pay $100k, even though it’s similar to other properties? Doubtful, therefore your property is goingbto be worth less because not as many people are interested in buying it, so you have to lower the price in order to sell.
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