On June 18, 2026, I had the privilege of speaking before the members of the Philippine Real Estate Service Practitioners, Inc. (PhilRES) – Mandaue City Chapter during its 6th General Membership Meeting held at Mandani Bay, Mandaue City. My presentation focused on a subject that has occupied much of my professional work in recent years: Evidence-Based Valuation (EBV) for Litigation, Expropriation, and Just Compensation.
For decades, real estate valuation has relied heavily on the Sales Comparison Approach. Comparable sales remain an important source of market evidence and continue to be one of the most widely accepted methods of determining value. However, in many assignments—particularly expropriation cases, litigation matters, infrastructure projects, and complex property disputes—the question often arises: Is market evidence alone sufficient to explain value?
The traditional appraisal process frequently emphasizes numerical adjustments derived from comparable transactions. While mathematically sound, such an approach may not fully capture the broader factors that influence value. Infrastructure investments, zoning regulations, land use policies, economic growth, scarcity, accessibility, environmental conditions, and development potential all contribute to the creation of value long before they are reflected in actual market transactions.
This observation led to the development of a framework I refer to as Evidence-Based Valuation (EBV).
The central premise of EBV is straightforward: value conclusions should not rely solely on comparable sales but should be supported by the reconciliation of multiple forms of evidence. These include:
Property Evidence – the physical characteristics of the property such as location, area, shape, topography, accessibility, improvements, and development potential.
Planning Evidence – land use plans, zoning classifications, infrastructure projects, government policies, and regulatory controls that influence future utility and development.
Economic Evidence – demand and supply conditions, growth trends, scarcity, investment activity, income potential, and broader economic drivers.
Market Evidence – comparable sales, listings, market transactions, and investor behavior.
These forms of evidence are not independent of one another. Rather, they interact to influence the highest and best use of a property, which ultimately forms the basis of value.
The concept is equally relevant in both ordinary valuation assignments and special-purpose engagements. Evidence-Based Valuation strengthens the foundation of value conclusions by integrating multiple forms of evidence beyond comparable sales alone. Even in ordinary market valuations, appraisers are expected to provide conclusions that are not only supported by comparable sales but also grounded in a thorough understanding of the property’s characteristics, planning context, and economic environment. Courts are often asked to determine compensation that is fair not only to the government but also to the property owner. In such situations, the challenge is not merely selecting a comparable sale but reconciling all available evidence to arrive at a value conclusion that is credible, transparent, and defensible.
Evidence-Based Valuation does not seek to replace established valuation approaches. Instead, it seeks to strengthen them by expanding the evidentiary foundation upon which value conclusions are formed. Comparable sales remain important, but they should be viewed as one component of a broader evidentiary framework rather than the sole determinant of value.
As valuation professionals, we are increasingly called upon to explain not only what a property is worth, but also why it is worth that amount. This requires a deeper examination of the factors that create, sustain, and influence value.
The EBV framework remains a continuing work in progress. Future developments will explore its application to litigation valuation, water rights valuation, infrastructure projects, feasibility studies, market analysis, and just compensation determinations. The objective is not to create complexity for its own sake, but to improve transparency, strengthen professional judgment, and provide decision-makers with more defensible valuation conclusions.
Ultimately, valuation is not merely a mathematical exercise. It is the process of evaluating evidence, reconciling competing perspectives, and arriving at a reasoned conclusion. In that sense, evidence is not an alternative to valuation—it is the foundation upon which valuation rests.
Value is created before it is measured.
Real LexEcon 