What external factors can lead to economic obsolescence?

Economic obsolescence, also known as external obsolescence, refers to a reduction in property value caused by external factors that are not within the control of the property owner. Community zoning changes or neighborhood decline directly fit this description, as these factors can significantly impact the desirability and value of a property.

When zoning changes occur, they may alter the permitted uses of a property or the surrounding area, potentially making it less attractive or functional for its intended purpose. For example, if an area is rezoned from residential to commercial, existing residential properties may suffer in value due to changes in their surrounding environment that no longer align with residential living preferences.

Similarly, neighborhood decline can lead to economic obsolescence as it often results in increased crime, lower quality of local services, and decreased demand, which directly affects property values. The overall health of a neighborhood plays a crucial role in maintaining property values; thus, any significant decline can detrimentally influence the economics of the area and surrounding properties.

In contrast, the other options, such as outdated design features or high construction costs, represent factors that may influence the interior condition or market dynamics of a property but do not necessarily stem from external sources impacting overall economic conditions in the area. Temporary market fluctuations are