What is a typical consequence of economic obsolescence?

Economic obsolescence refers to a reduction in a property's value caused by external factors that affect its desirability and functionality. This can include changes in the local economy, such as the closing of a major employer, the construction of undesirable facilities nearby, or shifts in market demand that impact property values negatively.

When these external elements come into play, they often lead to a decrease in the property's market value because potential buyers may perceive the location as less desirable. Unlike physical deterioration, which is related to the physical state of the property itself, economic obsolescence stems from factors outside of the property, making it a critical concept in real estate valuation. Understanding this concept helps real estate professionals assess and communicate the reasons behind a decline in property values that are not related to the condition of the property itself.

The other options touch on concepts connected to property degradation or market conditions but do not specifically address the essence of economic obsolescence, which centers on external influences leading to reduced property value.