Whether you're talking trophy ranches or trophy art, the value is determined purely by what the buyer and seller can agree on.
I overhead a couple of people recently lament in a hotel lobby about the price of land. They were referring to a particular “trophy” ranch that had just sold at a price so inflated that it was irrational. Not long after, I happened to see a photo of the famous painting, “The Scream,” done by renowned impressionist Edvard Munch in 1895. The painting recently set a record by selling for $119.9 million at public auction.
The painting has been described as a modern symbol of human anxiety, though I’m not sure I’d want to be reminded of that every day. Still, I like the image, though I can’t envision ever paying $120 million for it.
The thing is that when there is something truly unique that can’t be recreated in its original form, its value is determined simply by what two people can agree the value is. Whether it’s a trophy ranch or an iconic painting, value can only be determined by a buyer and the seller, and that nexus or intersection has nothing to do with “real” value, whatever that may be.