What is meant by 'economic obsolescence' in real estate appraisal?

Economic obsolescence refers to a decline in a property's value resulting from external factors affecting the property, particularly changes in the surrounding environment, such as neighborhood conditions, local economic shifts, or regulatory changes like zoning modifications. This type of obsolescence is not related to the physical condition of the property itself but rather to influences outside the property's control that diminish its appeal or market value.

In this context, when neighborhood conditions or zoning changes negatively impact the desirability of the property, it can lead to a decrease in its market value. This distinction is important for appraisers as it allows for a clearer understanding of the different factors influencing property values, separating external economic influences from those that might arise from internal property characteristics.

The other options describe different types of depreciation or loss of value. Internal factors would fall under physical obsolescence, temporary seasonal factors relate to market conditions rather than economic obsolescence, and aging pertains to physical depreciation rather than economic factors. Understanding these categories helps appraisers accurately assess property value and the reasons behind any observed changes.