Which aspect does economic obsolescence specifically address?

Economic obsolescence specifically addresses external factors that reduce a property's value, which is often beyond the owner’s control. This can include a range of issues such as changes in the neighborhood, the rise of undesirable developments nearby, or economic shifts that negatively impact property desirability. Such external factors can lead to decreased property values, even if the property itself remains in good shape physically.

The distinction is important because economic obsolescence stems from outside influences rather than from the property itself. This concept is critical in real estate valuation and market analysis, as it helps stakeholders assess risks associated with property investments and understand how external conditions can influence property performance over time.

Understanding economic obsolescence allows real estate professionals to advise clients effectively, especially in making investment decisions or determining appropriate pricing strategies.