Economic Characteristics
Scarcity
We usually do not consider land a rare commodity, but only a quarter of the earth’s surface is dry land; the rest is water. The total available supply of land is not limitless. While a considerable amount of land remains unused or uninhabited, the supply in a given location is generally considered to be limited.
Improvements
Building an improvement on one parcel of land can affect the land’s value and use as well as that of neighboring tracts and whole communities. For example, constructing a new shopping center or selecting a nuclear power site or toxic waste dump can dramatically shift land values in a large area.
Permanence of investment
The capital and labor used to build an improvement represent a large fixed investment. Although even a well-built structure can be razed to make way for a newer building, improvements such as drainage, electricity, water, and sewage systems often remain. The return on such investments tends to be long term and relatively stable.
Location
This economic characteristic, sometimes called area preference or situs, does not directly refer to a geographic location but rather to people’s preferences for given areas. It is the unique quality of these preferences that results in different values for similar units.
PREFERENTIAL LOCATION IS THE MOST IMPORTANT ECONOMIC CHARACTERÂISTIC OF LAND.
Physical Characteristics
Immobility
The geographic location of any given parcel of land can never be changed. It is fixed or immobile. Some of the substances of land are removable and that topography may shift.
Indestructibility
Land also is indestructible. Because Land is indestructible, Land does not depreciate. ManÂmade improvements on land depreciate and can become obsolete, which may dramatically reduce the land’s value. This gradual depreciation should not be confused with the knowledge that the economic desirability, therefore the value of a given location, can change.
Uniqueness
No two parcels of land are ever exactly the same. Although they may be very similar, all parcels differ geographically because each parcel has its own location. An individual parcel has no substitute because each is unique. The uniqueness of land also is referred to as nonhomogeneity.
