Property Valuation

Which type of depreciation in real estate appraisal is caused by factors external to the property, such as a new industrial facility nearby?

APhysical deterioration
BFunctional obsolescence
CExternal obsolescence✓ Correct
DDeferred maintenance

Explanation

External obsolescence (also called economic obsolescence) is caused by negative factors outside the property boundaries, such as a new industrial facility, highway construction, or neighborhood decline. It is typically incurable.

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