What term describes the deterioration caused by outside factors in residential properties?

The term that describes the deterioration caused by outside factors in residential properties is external obsolescence. This type of obsolescence occurs when the value of a property decreases due to external conditions that are not necessarily related to the property itself. Factors can include changes in the neighborhood, such as an increase in crime rates, the construction of undesirable developments nearby, or a decline in local economic conditions.

External obsolescence affects the market value of a property because it typically reflects conditions beyond the control of the property owner, making it a significant consideration in property valuation. Properties facing external obsolescence might require adjustments in pricing or additional efforts in marketing to attract buyers. Understanding this term is essential for real estate professionals as it helps them assess the overall value and appeal of a property in relation to environmental influences.