Property Valuation
When a Hawaii appraiser uses the cost approach for a 30-year-old home, they must account for which type of depreciation most significantly?
AExternal obsolescence
BFunctional obsolescence
CPhysical deterioration✓ Correct
DMarket value loss
Explanation
Physical deterioration (wear and tear, aging) is generally the most significant type of depreciation for older properties. A 30-year-old home will have accumulated substantial physical depreciation.
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