Functional obsolescence

When a property’s value decreases due to its poor design, style or lack of modern facilities

Functional obsolescence is one reason why a home might drop in value. For example, the market value of a home that doesn’t have enough electrical power to run a dishwasher, microwave and hair dryer at the same time will steadily fall. Other than functional obsolescence, a property can also lose value due to poor maintenance or a slump in the economy.

See: Depreciation, Appraisal