A motel is the subject of an appraisal and it is determined that a rerouting of a county highway has limited customer access to the motel. This is an example of
Economic obsolescence (also known as external obsolescence) occurs when property value declines due to factors outside the property itself that the owner cannot control. In this case, rerouting of a county highway reduces customer access, negatively impacting business and property value. This is entirely external and beyond the motel owner’s ability to correct.
By contrast:
Regression (B) refers to when a higher-value property loses value due to surrounding lower-value properties.
Functional obsolescence (C) is caused by design flaws or outdated features within the property itself.
Landlocked property (D) refers to a parcel with no legal access, which is not the case here.
Therefore, the correct answer is economic obsolescence.
[Reference: Massachusetts Real Estate Salesperson Candidate Handbook – Valuation and Market Analysis; Principles of Appraisal., ]
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