What does economic obsolescence refer to in property assessment?

Economic obsolescence refers to the loss of value in a property that is attributable to external factors that are not a direct result of the property itself. This could include elements such as changes in the local economy, increased crime rates in the area, or the construction of undesirable developments nearby. Such factors can cause a decline in property values even if the property itself remains in good condition.

Understanding economic obsolescence is crucial for property assessors because it highlights the importance of external influences on property value beyond the physical characteristics of the property itself. This concept is pivotal in accurately assessing a property’s worth, especially in changing economic climates or developing neighborhoods.