People get confused about the government paying "fair market value" on a piece of private property they want to confiscate at the threat of violence, or in double-speak: "Eminent Domain" (ED).
Fair market value can only occur in a market. When a gun is placed on a property owner's neck and told he will sell or else, this is not a market. It is simply violence.
They do use the word fair, don't they. How fair is having a gun to the neck?
A price can only be determined by the agreement between a buyer and a willing seller. An unwilling seller (one who is being victimized by ED) doesn't offer a price, so there is no market and therefore no market price.
To use comparable sales prices (comp) in the area as a measure of fair market value is not necessarily an accurate pricing mechanism. A price on a property can be agreed on by a buyer that is well over the highest comp.
It depends on how much the buyer wants it and how motivated the seller is to sell it. It also depends on the nature of the property. There may not have been many sales in the immediate area, or the condition of the properties vary. There are many variables. I personally sold a house well above any recent comps in the area.
There is and cannot ever be any "fair" or any "market" in Eminent Domain.
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