What factors can lead to economic obsolescence?

Economic obsolescence refers to a reduction in property value due to external factors that are beyond the control of a property owner. The most significant factors contributing to economic obsolescence include location and market conditions. For example, if a neighborhood experiences a decline in economic activity, increased crime rates, or changes in zoning that diminish its appeal, these external influences can lead to a drop in property values.

While other options mention aspects like natural disasters and physical property issues, these tend to fall under different categories of obsolescence. Natural disasters can result in physical damage, and age may contribute to physical deterioration but are not classified as economic obsolescence. Similarly, design flaws may make a property less desirable but are usually related to functional obsolescence rather than economic factors. Economic obsolescence is specifically linked to external market conditions, making the focus on location and market conditions the most accurate choice.