Functional, Stylistic and Economic Obsolescence

Functional Obsolescence, with regards to real estate, occurs when there is a loss of building utility.  This can occur with a home that is too lavish or improved for a neighborhood, or on the other end of the spectrum, a home that is much smaller or under-improved for an area.  Functional obsolescence can also occur when a property no longer meets the basic needs and wants of a certain society; such as a 2 bedroom, 1 bathroom home or a home heated with coal. Functional obsolescence can be curable or incurable depending on how difficult it is to overcome the obsolescence.

Stylistic Obsolescence is a home which does not conform stylistically to the neighborhood or incorporates some sort of material that is no longer manufactured or utilized.  It can be a contemporary home in a traditional neighborhood or a home with a EIFS exterior that is no longer used.  Stylistic obsolescence is almost always curable, but it is not always economically feasible to do so.

Economic Obsolescence is rarely curable.  This occurs normally with older properties and is usually out of the control of the owner.  Economic obsolescence can occur when commercial zoning encroaches onto residential or when a road widening diminishes the front yard of a home.

It’s important to understand obsolescence and the effect it can have on the value of your property.  In some cases, especially with stylistic obsolescence, it may take a third party to inform you of the status (just like when you wear your favorite skinny tie and leisure suit).

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