In real estate, Economic Obsolescence refers to a loss in a property’s value caused by external economic or environmental factors rather than by physical deterioration or defects within the property itself. These factors are typically outside the property owner’s control and may include zoning changes, increased traffic or noise, declining neighborhood conditions, or shifts in local employment or market demand.
Because economic obsolescence originates from external influences, it is often considered incurable or difficult to remedy by the property owner. This type of obsolescence is an important consideration in property appraisal, as it can significantly affect market value even when the property is well maintained and physically sound.
