What exemplifies Functional Obsolescence?

Functional obsolescence refers to a decrease in property value due to changes in design preferences, technology, or functionality that render a property less desirable. The choice involving single pane window systems that waste energy clearly illustrates this concept.

Single pane windows are outdated in today’s market, where energy efficiency is highly valued. The lack of insulation and inefficiency in thermal performance can lead to higher energy costs for heating and cooling, making such a property less appealing to potential buyers or renters. Modern standards favor double or triple-pane windows that provide better insulation and energy savings, thus an older property with single-pane windows reflects functional obsolescence.

Other choices, while they may lead to diminished property values, typically relate to physical deterioration or neglect rather than changes in functionality or market standards. Worn carpets and peeling paint are examples of physical deterioration, deferred maintenance refers to neglect in upkeep, and crumbling infrastructure points to severe physical damage, rather than obsolescence in function or design.