What does "economic age" refer to in property appraisal?

Economic age in property appraisal refers to an estimation of how much life has been lost due to economic factors. This concept helps appraisers determine the effective age of a property as influenced by external economic conditions, which may affect its value and viability.

While the actual age of the property (how long it has existed) is relevant, economic age focuses specifically on how market trends, economic conditions, and other external influences have impacted the property’s perceived longevity and utility. Properties can age economically much faster than their physical age due to shifts in demand, changes in neighborhood dynamics, or economic downturns, which affect their value and livability. Understanding economic age is therefore critical for accurate property valuation and reporting in the appraisal process.