Property Valuation
An Alaska residential property was appraised at $425,000. The owner disputes the value, claiming the appraiser failed to consider permafrost-related foundation issues that require $30,000 in remediation. This claim relates to which type of depreciation?
AExternal obsolescence
BFunctional obsolescence
CPhysical deterioration✓ Correct
DEconomic obsolescence
Explanation
Physical deterioration refers to actual physical damage, wear, or structural problems in the property. Permafrost-caused foundation issues represent physical deterioration — tangible structural damage requiring repairs — and must be reflected in the appraisal.
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