Every piece of land is different, and prices vary in different areas. Land values from nearby or adjoining parcels have a more constant relationship to one another.
The characteristics on and around a plot of land have a significant impact on its worth; This is especially in land being considered for development. Its features influence the use of the land and its potential to achieve its Highest and Best use. This increases the value of land based on the income it could generate in the future. These characteristics include the slope, terrain and the presence of utilities such as sewer, water and power services. The intrinsic value of a parcel of land, such as the presence of oil or minerals, boosts its worth.
Aside from tangible and visible factors, the value of land is also determined by economic factors such as the forces of supply and demand. Land values increase when the demand for land exceeds the available supply.
There are various methods that are used in the determination of land pricing. One of the most common is the Comparative Market Analysis which involves collecting information on the values of land in the surrounding areas and then making adjustments to fit your plot of land. Another way is by conducting a feasibility study on its economic viability and then determining the value based on the income it could generate in the years to come.
It is important to note that set values are prone to change over given time frames. It is advised to seek professional services while determining the value of your plot in order to ensure that you reach an informed decision based on market knowledge.