The subject is an improved property located in a market wher…

The subject is an improved property located in a market where the cost of construction is increasing by 3% per year, but the loss in value per year due to all forms of depreciation (physical, functional, and external) is 2%. The site values (VL) have been stable for the last three years and should remain stable in the near future. This market is in balance without significant pressure on sellers or buyers. Which of the following statements is correct? 

The subject property is a 0.75-acre site with a single-famil…

The subject property is a 0.75-acre site with a single-family residence that is located in a FEMA flood hazard area. The site is about 24 inches below the minimum building elevation, which would eliminate any feasible development of the site today. In this area, land in flood hazard areas sells for $10,000 per acre, and buildable residential sites in this market sell for $90,000. What is the value of the site (VL)?