What is external obsolescence?

External obsolescence refers to a reduction in a property's value that arises from adverse influences or conditions outside of the property itself. This could include factors such as changes in the surrounding neighborhood or community, nearby developments that are undesirable, environmental hazards, or economic downturns that affect the market.

When external obsolescence occurs, it diminishes the appeal and market value of a property, even if the property is otherwise well-maintained and internally sound. This concept is crucial for appraisers, as they must consider both internal and external factors when evaluating a property's worth.

Other concepts provided, such as deterioration due to interior defects or repairs, pertain to physical depreciation rather than external influences. Similarly, a decrease in demand due to oversupply focuses on market dynamics rather than external obsolescence specifically. Lastly, the idea that property values are unaffected by external factors contradicts the definition of external obsolescence itself, as it inherently involves external influences impacting value.