Market value, fair market value, ad valorem, and insurable value are distinct appraisal concepts used for different decisions: sales pricing and lending, legal/tax benchmarks, property taxation, and insurance coverage respectively. This post explains each term, compares them, and gives practical guidance for owners, buyers, appraisers, and insurers.
Quick guide and decision points
Definitions and how they differ
Market value
Typically used in appraisals for lending. The definition is contained in the FNMA/Fredie Mac appraisal form reports
Fair market value
Fair market value (FMV) is a legal standard similar to market value but often used in tax, estate, and litigation contexts; it assumes both parties are informed and acting without compulsion and may be interpreted by statutes or courts. FMV can be the same as market value in practice, but legal definitions and evidentiary standards can make FMV the controlling figure in disputes or tax filings.
Ad valorem
Ad valorem literally means “according to value” and describes taxes levied on property based on assessed value (e.g., property tax). Ad valorem assessments use valuation methods and statutory rules that differ from market appraisals; assessed value may lag market changes and include exemptions or caps.
Insurable value
Insurable value is the amount required to replace or repair the insured improvements (buildings and sometimes site improvements — not the land — and excludes market goodwill or land appreciation. Insurable value focuses on replacement cost and policy terms rather than what a buyer would pay for the property.
Comparison table
Concept
Purpose
Typical Use
Who sets it
Price in open market
Sales, mortgages
Appraiser/lender
Legal/tax benchmark
Taxes, estates, litigation
Courts/IRS/statute
Tax base
Property taxation
Assessor/municipality
Replacement cost
Insurance coverage
Insurer/appraiser
Practical tips and risks
Pre-Appraisal Checklist for Real Estate Valuation
Purpose: Help sellers, buyers, owners, and appraisers gather the facts that most influence market value and fair market value opinions.
This is a cornerstone principle and incorporates other principles such as:
Proper use of this principles helps to identify the single use that produces the greatest value as of a specific date for a parcel of land.
There are four specific tests that must be considered prior to the use conclusion. These are:
Each of these tests are applicable to the land and to the existing improvements (if any).
Key considerations for these tests:
Site size.
Shape of the site.
Availability of utilities.
Market demand.
Topography.
Access.
Development costs.
Absorption rate
Expected return
Zoning.
Political risk.
Social risk.
Clarifying questions to answer:
Legal permissibility determines the permitted uses and maximum building size.
Physical permissibility determines the limits of what can be built on the site.
Financial feasibility measures the costs versus the returns and helps in demonstrating the feasibility of building.
Maximum productivity the final determination of the use that yields the highest value. (sales comps and income models).
How appraisers apply HABU:
Risks, limitations and practical cautions to this analysis:
The first church was built in 1927 at the corner of A Street and 6th Street (to the north of the Old School). In 1950 a new church was built and in 1963 the property was enlarged. Currently the church owns a home at 15524 6th Street (to the north of the church), and the religious center includes a parish hall, parish center (15503 5th Street), a mother’s chapel, and a rectory.
In 1982, the church acquired a former Bank of America building at 15500 7th Street and renamed it the Unity building. Included in this acquisition was a parking lot between this building and 6th Street. This building was acquired for use as a civic and community resource. City planning workshops, meetings for non-profit organizations, neighborhood association meetings, small-business coalitions aiming to foster development along 7th Street, monthly food/clothing distributions, are several of the uses. In addition, the building was available for private events with the revenue going to support local social services.
In 2021, the building needed extensive repair including, roof replacement, electrical, modernization of fire safety systems, meeting ADA requirements, restoration of the original facade, seismic retrofit, and asbestos removal. As of 2025, the city does not report any finalization of the permits, and a certificate of occupancy has not been issued.
These properties have importance to the revitalization of the Old Town Village district as they function as a social hub, service assistance, and a religious center. Additionally, they serve as a point of historical interest to visitors.
This statute was erected in 1996 by the City of Victorville. The property consists of a six-sided memorial in an open courtyard. The memorial/courtyard provides a resting place for pedestrians in this district.
This building is not associated with the Victorville Fire Department. Founded in 2000, the museum contains artifacts and memorabilia related to fire heritage and the evolution of fighting fires. It is open to the public on Saturdays from 9 AM to noon.
This structure was built as a USO Club in 1941, servicing the local military until 1947 at which point it was disbanded and sold to the city. This building used by the city as a community center. In 1992 the building was designated as a historical landmark. The cultural arts center opened in 1998 and offered live performances until the building was damaged by fire. In 2024, the center was scheduled to reopen. Events include:
Built in 1992, this property was used by the school district until 1960 at which time it closed. In 1983 the City acquired the property and began a rehabilitation which was finished on 07/02/1985. Currently, the property functions as a community cultural center and event venue managed by the city. The building is available for
It may also be rented for:
The building is available for:
The property can be leased for:
A relatively small parking lot in near proximity to the Performing Arts Center and Fire Museum. It is one block to the east of Seventh Street. The parking lot will need repair and updating.
The Mormon Springs Monument is located on the southeastern corner of the lot. Erected in 1998, it provides a brief history of the importance of fresh water to 19th century travelers through the desert.
Spanning the intersection of Seventh Street and D Street, it signals the entry to Old Town Village. The archway is lighted with energy efficient LEDs and visually brands the district as a Route 66 landmark. The city views the archway as a complement to its Commercial Façade Improvement Program, which is designed to enhance the street appeal to existing commercial properties along Route 66.
August 1, 2025 - Structure of Old Town Village The Old Town Village district consists of 84.29 acres with the following boundaries: - North : D Street. - South: Forrest Avenue. - East: Eleventh Street. West: First Street. The existing entry points into the village are: - D Street (links I-15 to the Village and Route 66 west of I-15). - 7th Street (Route 66 running north to south through the district) - Hesperia Road (at the eastern end of the district). Properties that may be leveraged to attract Route 66 visitors are: 1. Route 66 - This is Seventh Street running north to south through the district. An entry arch is located at the junction of D and Seventh Street. 2. Route 66 Museum - The former Red Rooster Cafe with exhibits of Route 66 and the history of Victorville. Manned by volunteers with free admission. 3. Lane's Crossing Park - A new addition (2024). This is a fenced open air park with audio visual facilities, fire pit and a caboose. 4. The High Desert Performing Center - The former USO center, offering live theater performances, musical events, art exhibitions and are classes. 5. Fire Museum - Opened limited hours, this is an old fire station with historical fire fighting equipment. 6. Greenspot Motel - Built in 1932 as a motor court motel, this facility offers themed lodging in the district. 7. Veteran Memorial - Dedicated in 1996, this is an open air courtyard with seating and a memorial to veterans from Victorville. Acts as the central point in the Veteran Day Celebration. Historical properties in the district that may be viewed on a walking tour include: 1. The Turner House - a residence built in the late 1880s. 2. The Old School - Built in the 1920's. 4. St Joan of Arc Catholic Church - An older church that is central to Old Town. Restaurant/Bars found in the district are: 1. Guadalajara Meat Market - Mexican cuisine with indoor dining. 2. Valparaiso Mexican Restaurant - A walk-up fast food restaurant. 3. AJ's Bar. Specialty Retail include: 1. Wild Goose Vintage & Thrift - Offers vintage clothing and antiques. 2.Santa Fe Trading Company - Specialty home goods. Additionally there are periodic live music and art exhibitions. 3. Sweet Treasures - A specialty skin care store. 4. Barrel House - A historic building adjacent to the Route 66 Museum that is currently a liquor store and market. Currently the following events draw visitor and residents: 1. Christmas Parade along Seventh Street. 2. HD Market Night - Located in a vacant lot on Seventh Street. 3. Veteran Day Celebration - Centered at Veteran Memorial. Currently, the district has limited tourists outlets and will need significant improvement. The city does recognize that the Route 66 Centennial is a significant event that may result in placing the city as a tourist destination for Route 66 domestic and international visitors and is actively attempting to attract new businesses to the district. City Infrastructure and Improvement projects are: 1. Sidewalk repair and improving pedestrian/biking improvements. 2. A program offering up to $50,000 financial assistance to help buildings meet code standards, ADA compliance and facade improvement (to enhance a Route 66 theme). 3. Waiving of development impact fees for new businesses in the district. Future proposed projects include: 1. Narrowing of Seventh Street to 2 lanes with on street parking. 2 A roundabout at Seventh Street and Forrest Avenue (by the Veteran Memorial). 3. Improving and enhancing the City parking lot at 7th and B Street along with the parking lot at 8th and C Street. Funding sources for these projects include: 1. Community Revitalization Investment Agency (CRIA) - increment in value from property tax within the district. 2. Community Development Block Grants. 3. General Fund. A potential future funding source would come from the formation of Business Improvement District (BID). In summary, this district has relatively limited tourist appeal with a significant percentage of vacant land and vacant commercial buildings in need of repair and updating. The city is facing a short time frame (to capitalize on the Route 66 centennial) but is actively attempting to draw retail centers that are needed to draw and keep visitors. ? In the next post I will review land uses by category and percentages that currently exist in the district.
In future posts, I will review the Old Town Village in terms of existing land uses, potential for development, current conditions and potential funding sources