Property Valuation
An appraisal of a property in the Pittsburgh market shows a 3-bedroom home with only one bathroom in a neighborhood where similar homes have two bathrooms. This represents which type of depreciation?
APhysical deterioration
BExternal obsolescence
CFunctional obsolescence✓ Correct
DEconomic obsolescence
Explanation
Having only one bathroom when the market expects two is an example of functional obsolescence — a loss in value due to a feature that does not meet current market standards. This reduces the property's value compared to more functional competitors.
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