Which valuation method focuses on current construction costs?

The cost approach is the valuation method that emphasizes current construction costs. This approach involves estimating the cost to replace or reproduce a property, adjusting for depreciation to arrive at a property's value. It is particularly useful for appraisals of new or unique properties where there may not be sufficient comparable sales data, as it considers both the cost of materials and labor involved in construction.

By focusing on current construction costs, the cost approach provides a tangible basis for valuing a property based on the expense involved in building it, rather than relying on market activity or potential income generation. This makes it a valuable method for appraisers when dealing with properties that do not frequently transact in the market or have significant variances in their physical characteristics compared to surrounding properties.