Excess construction cost that the market does not recognize creates:
Correct Answer
C) Functional obsolescence from superadequacy
Why this is correct: A superadequacy is a type of functional obsolescence where a feature is excessive or overbuilt for the market, so its cost exceeds its contributory value. Why the other choices are wrong: External obsolescence from market indifference is wrong; external obsolescence comes from outside factors, not from an internal over-improvement. Physical deterioration of the excess components is wrong; this is not wear, but a design/utility issue. An increase in the property's contributory value is wrong; by definition, a superadequacy does not add value commensurate with its cost. Exam tip: Superadequacy = 'too much of a good thing' that the market won't pay for.
Why This Is the Correct Answer
Why this is correct: A superadequacy is a type of functional obsolescence where a feature is excessive or overbuilt for the market, so its cost exceeds its contributory value. Why the other choices are wrong: External obsolescence from market indifference is wrong; external obsolescence comes from outside factors, not from an internal over-improvement. Physical deterioration of the excess components is wrong; this is not wear, but a design/utility issue. An increase in the property's contributory value is wrong; by definition, a superadequacy does not add value commensurate with its cost. Exam tip: Superadequacy = 'too much of a good thing' that the market won't pay for.
More Cost Approach Questions
In a cost approach for a proposed building, the appropriate cost basis is generally:
A warehouse cost $210,000 to build when the cost index stood at 105. The index is now 210. Its indicated current cost is:
The age-life method expresses depreciation as:
Market extraction of depreciation is limited by the fact that it:
Functional obsolescence caused by a deficiency is measured as curable when:
Curable physical deterioration is measured at cost to cure because:
A 2,050 sq ft dwelling is priced at $178 per square foot with a $34,000 detached garage and $21,500 of site improvements. Cost new is:
A house has three bedrooms sharing one bathroom, and adding a second bath is economically justified. This is:
Direct costs in a construction budget include:
An appraiser writes that a 40-year-old house has an effective age of 10 but describes original wiring, original kitchen and a 25-year-old roof. The report's problem is:
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