What is Land Value?

Land value is the overall value of a piece of property.

How Does Land Value Work?

The value of a piece of property includes a number of variables including location, the distance of from commercial and health amenities (for example, shopping centers, hospitals and restaurants), the quality of the school district and enhancements to the property itself. The land value of a piece of property correlates directly with these variables. For example, property located in an attractive setting in a safe, high-quality school district likely has a relatively high land value.

Why Does Land Value Matter?

Property in the real estate market is priced according to its land value. Socioeconomic changes and commercial development in an area affect land values and can result in capital gains or losses for property sellers.