What are the key factors that must be present for a property to have value?

The key factors that must be present for a property to have value include utility, scarcity, and desirability.

Utility refers to a property's ability to satisfy the needs and wants of potential buyers. A property must serve a purpose or fulfill a need for it to have value; for instance, a residential home provides shelter, while commercial property can generate income.

Scarcity speaks to the limited availability of a certain type of property in a specific market. When demand exceeds supply, properties can appreciate in value because they are less readily available to consumers. Conversely, if there is an abundance of similar properties, their values may decline due to oversupply.

Desirability is related to both the attributes of the property and the surrounding area that make it appealing to buyers. This can include factors such as location, amenities, and the perceived lifestyle associated with the property. Higher levels of desirability suggest that more people want the property, which can drive up its value.

Together, these three factors interact to establish market value, making them essential components for understanding real estate valuation.