Which term describes the condition where a building is less desirable due to its design?

• A. Functional Obsolescence
• B. Economic Obsolescence
• C. Physical Deterioration
• D. Progression

Answer: (A)

Functional obsolescence occurs when a property is still structurally sound but its design or layout no longer meets current market preferences, making it less desirable and reducing value. This happens when features like an outdated kitchen, awkward floor plan, insufficient bathrooms, or poor circulation make living there inefficient or undesirable compared with newer designs. The issue is internal to the building’s design, not caused by wear or external factors.

Economic obsolescence would involve outside factors—things like a noisy street or zoning changes that affect value. Physical deterioration describes visible damage or wear, such as leaks or cracks. Progression is a market principle about how the value of nearby properties can influence a given property, not about design-related obsolescence.