Property Valuation
Economic obsolescence (external obsolescence) differs from functional obsolescence in that economic obsolescence:
AResults from physical deterioration within the property
BIs caused by factors outside the property, such as a nearby freeway or economic decline✓ Correct
CCan be cured by remodeling the property
DOnly applies to commercial properties
Explanation
Economic (external) obsolescence results from factors outside the property's boundaries — such as proximity to a noisy highway, industrial area, or neighborhood economic decline. Unlike some functional obsolescence, external obsolescence is typically incurable.
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