Location

Question 1

Unique and Permanent

Answer 1

Of all the characteristics of land, location (situs) has the greatest effect on property value. Land’s immobility, a basic physical characteristic, dictates that the situs, or location of a parcel of land, is both unique and permanent.

Therefore, if the land is located in an area where available land has a high demand, the land has a substantially higher value. The loss of value can also be a result of location when a negative influence occurs outside the property — for example, a commercial use abutting a residential property

Question 2

Value of the Location

Answer 2

If the land is inaccessible from a practical standpoint or is located in an area with little or no demand, the economic value is depressed. In addition, the value of the location can change as people’s preferences change.

Fifty years ago, people took flight from urban centers to the suburbs, which resulted in substantial property value reductions in many urban areas. Recently, this trend has begun to reverse itself. People are rediscovering inner cities and rehabilitating older properties, restoring lost value.