What is Physical Obsolescence characterized by?

Physical obsolescence is primarily characterized by a condition of aging or deferred maintenance. This term refers to the natural deterioration that occurs over time due to factors such as weather, usage, and lack of timely repairs or maintenance. As properties age, they may develop issues like structural wear, roofing problems, or outdated building systems, which can lead to a notable decline in their physical condition. In this context, deferred maintenance happens when necessary upkeep is postponed, exacerbating the wear and ultimately resulting in a property that is less appealing and potentially less valuable.

While other factors, such as outdated designs and equipment, market conditions, and excessive operational costs, can certainly impact a property, they are not the primary characteristics of physical obsolescence. Outdated designs may relate more closely to functional obsolescence, which involves the property's layout becoming less desirable despite being structurally sound. Market conditions can fluctuate based on economic factors but are separate from the property’s physical state. Excessive operational costs may arise from inefficiencies but are also not under the definition of physical obsolescence, which specifically concerns the property's physical deterioration.