I am a certified appraiser in VA.
We as appraisers reference the Marshall Swift Cost Handbook for information when completing the cost approach to value on our reports.
How accurate do you feel this method is? I feel personally there is no better judge than the local contractor that is in the field and making the purchases for the materials.
The cost approach to value provides a much needed reality check in both strong and weak markets, establishing a trustworthy benchmark of value.
In theory you are correct in saying that local contractors are the best judge of the current cost of construction, but in reality having local builders play a part in determining real estate values is sort of like having the fox guard the hen house.
Builders want everyone to think it costs more to build than it really does.
An impartial trustworthy party to the appraisal process is the key and Marshall Swift does an admirable job.