External obsolescence is a reduction in value caused by an undesirable factor outside the property. Locational obsolescence, external obsolescence, economic obsolescence, and environmental obsolescence are all types of external obsolescence. External obsolescence is generally not curable.
The following are examples of external obsolescence
|•||Construction of a landfill or industrial site next to a residential neighborhood will cause values to decrease (locational obsolescence).|
|•||Construction of a government subsidized apartment complex next to a residential subdivision will cause values to decrease (locational obsolescence).|
|•||An increase in interest rates will cause values to decrease (economic obsolescence).|
External obsolescence is rarely (if ever) curable.