Property Valuation
What is 'external obsolescence' in property valuation?
APhysical deterioration caused by outside weather conditions
BA loss in value caused by negative influences outside the property boundaries✓ Correct
CDepreciation of the building's exterior components
DZoning changes that affect the property's permitted uses
Explanation
External obsolescence (also called economic obsolescence) is a loss in value caused by factors outside the property's boundaries, such as proximity to a highway, industrial facility, or declining neighborhood. It is almost always incurable because the property owner cannot control external factors. It can be measured by analyzing paired sales or through the income approach.
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