sd is right in saying that the value is what someone else will pay for it and the best basis is what someone else paid nearby for something similar. Don’t fret over the 800k prices, your ride is slowing coming to a full and complete stop, keep your hands and feet inside the car for your own safety (heard that at Magic Mountain last week and just knew it would apply to life somehow).

I hate replacement cost as a basis. I paid 190k for a house at the lowpoint of the last cycle. My insurance company (and confirmed by a second quote from another company) said that I needed to insure it for 270K for replacement cost. After I asked them if I could order one of the drinks they had been drinking they explained that building a single house is not as cost effective as building tract homes because the materials, subs, waste, plans, etc. all cost more when bulding a single house. So non-tract homes cannot use the same cost per sq.ft. as customs and large tracts cannot use small tract numbers. Lot size doesn’t work because many large lots have slopes and small lots have views in the same developments. As the former owner of a large lot with a slope, no thank you, I’ll pay more to have the smaller view lot and sit in a chair admiring the view rather than picking weeds on the hill every Saturday. Where the lot is located is far more important than the sq. ft. to many buyers.