In May 2026, Appraiser Lena is valuing a custom home that was completed last month in Aspen Ridge, an area with very few comparable sales. Which approach is often especially useful as support in this situation?
Correct Answer
C) The cost approach, because current construction cost is observable and depreciation is minimal
For a newly completed custom home with limited comparable sales, the cost approach is often especially helpful because current construction cost can be estimated and depreciation is usually small. It is commonly used as support when the property is new, proposed, or unique.
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After a March 2026 fire, an insurer asks Appraiser David to estimate the current cost of rebuilding a historic courthouse with the same design, layout, and materials it had before the loss. Which cost concept best fits that assignment?