What does external obsolescence imply about a property’s value?

External obsolescence refers to a reduction in a property's value caused by external factors that are not inherent to the property itself. These factors can include economic downturns, changes in the neighborhood, environmental issues, or zoning changes that negatively impact the desirability of the location.

The primary focus of external obsolescence is that it arises from outside influences, affecting the property's marketability and its overall valuation. This is distinct from issues like interior conditions or local economic growth, which do not reflect the nature of external obsolescence. In essence, when assessing a property for valuation, understanding this concept allows an appraiser to account for various elements that may detract from a property's worth, even if the property itself is well-maintained or improved.