What is an essential characteristic of a cost manual used in property valuation?

A cost manual is a critical tool in property valuation that provides standard costs of construction. This characteristic is essential because it lays the groundwork for determining the estimated value of a property based on what it would cost to reproduce or replace its structures and improvements. The standard costs offer a reference point for assessors and appraisers to accurately estimate property values, ensuring consistency and reliability across assessments.

In the realm of property valuation, reliance solely on sales data would not provide a complete picture, as this approach overlooks the unique aspects of different properties and their replacement costs. Similarly, focusing exclusively on historical data can be limiting, as it may not reflect current market conditions or costs. While analyzing economic trends is certainly beneficial and can offer insights into market dynamics, it does not serve as the primary function of a cost manual. Thus, the inclusion of standard costs of construction is what fundamentally defines a cost manual’s role in property valuation.