Comment by andrewla
1 day ago
> Do you believe you can determine the true value of improved land
It is at least theoretically answerable. In the extreme, yes. We can simply force the sale of the land. Practically speaking, no, we cannot answer that question in a deeply illiquid market.
For the unimproved value I'm not certain that there is a consistent and useful theoretical definition that can be translated to practice. Even in the extreme the question of the unimproved value of the land becomes difficult. Were we to raze all improvements and force the sale would that give us an answer? Do we include the cost of razing? What counts an unimproved? Can we leave trees or grass?
To expand on this differently -- if we have a model that produces estimates of the "true value of improved land", then we can validate that model whenever property sells. It would be a slow process but if we have a model and the model parameters capture a significant portion of the variance, then we would expect the model to converge over time.
Nobody does this, of course; it is not usually politically expedient to do so for a number of reasons, not least of which is the predictability of taxes for a given parcel. But at least it is theoretically asymptotically achievable. Not so for unimproved land value because the value you are trying to estimate is not an actual quantity.