For a property to have value, which of the following must be present?

For a property to have value, it is essential that utility, scarcity, and desirability are present. Utility refers to the usefulness of the property to potential buyers or users; it needs to serve a purpose, whether for residential, commercial, or agricultural use. Scarcity indicates that the property is limited in supply, which can enhance its value, especially in areas where demand exceeds availability. Desirability is about the demand for the property in the marketplace, driven by factors such as location, amenities, and market trends.

These three factors work together to create demand in the marketplace, influencing how much someone is willing to pay for a property. Without a combination of these elements, a property may not achieve a recognized market value; even if the property has great aesthetics or is in good condition, it will not have value if it is not useful (utility), there are plenty of similar properties available (scarcity), or if it does not appeal to potential buyers (desirability). The emphasis on these three characteristics makes them fundamental to establishing value in real estate appraisal.