In real estate, what is functional obsolescence primarily concerned with?

Functional obsolescence refers to a reduction in the value of a property due to outdated or undesirable features that no longer meet the current needs or preferences of buyers. This can occur when properties have characteristics that are less functional or no longer useful compared to modern standards. For example, a home with a layout that is no longer appealing, such as a single bathroom for a large family or a lack of energy-efficient appliances, may experience functional obsolescence because these features do not align with contemporary buyer expectations.

Understanding this concept is essential for real estate professionals, as it directly impacts the marketability and value of a property. Properties suffering from functional obsolescence may require renovation or updates to restore their competitive edge in the housing market, thereby enhancing their appeal and value.