How does California law define "market value"?

California law defines "market value" as the price at which a property would sell in an open market, reflecting the consensus of what both a willing buyer and a willing seller would agree upon in a competitive environment. This definition emphasizes the importance of fair access to the market where properties are exposed to potential buyers without undue pressure or limitation, allowing for a genuine determination of value based on current market conditions and comparable property transactions.

Market value takes into account various factors such as property location, physical characteristics, and recent sales of similar properties in the vicinity, making it a practical and widely accepted measure. In contrast, other options such as the value after improvements or assessed value determined by an assessor do not necessarily reflect the true market conditions or buyer sentiment at a given time. Furthermore, a value based on potential rental income is a method used under specific circumstances, such as income-producing properties, but does not represent overall market value in the general real estate market context.