Which term best describes the alteration or advancement in real estate that renders older properties less appealing?

Functional obsolescence refers to a reduction in the desirability or utility of a property due to changes in design, technology, or consumer preferences that makes the property's features less attractive. This term accurately characterizes how older buildings might not meet the modern standards or preferences of potential buyers or renters, even if the physical structure is still sound. Examples include outdated layouts, lack of amenities that newer properties have, or insufficient technology integration.

In contrast to functional obsolescence, functional deficiency specifically refers to when a property's design is inadequate for its intended use, which is a narrower focus on specific shortcomings rather than broader trends affecting desirability. Geographic obsolescence pertains to location-related issues that impact property values, such as neighborhood decline or changes in accessibility, rather than the property itself. Thematic obsolescence often relates to fashion trends and design styles that can become outdated, which is similar but not specific to the property’s functionality. Each of these other terms capture different aspects of property valuation and desirability, but functional obsolescence specifically addresses the decline due to older properties not aligning with modern demands or standards.