Example of economic obsolescence in real estate?
Correct Answer
C) Noisy highway next to home
A noisy highway adjacent to a home is a classic textbook example of economic (external) obsolescence because the source of value loss — the highway — is entirely outside the property and beyond the owner's control. The noise, pollution, and traffic safety concerns depress market value regardless of the home's physical condition or functional design, making the depreciation incurable. California real estate appraisal practice, consistent with USPAP guidelines, classifies this as external obsolescence when valuing properties using the cost approach.
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