What is defined as a loss of property value due to external negative factors that are outside the owner’s control?

External obsolescence refers specifically to a decrease in property value that is caused by factors outside the property itself and the owner's control. This can include things like changes in the surrounding neighborhood, economic downturns, alterations in zoning laws, or other external conditions that negatively impact the desirability and utility of the property.

For instance, if a factory is built nearby that causes pollution or increases noise, the residential properties in the vicinity might suffer a decline in value despite their intrinsic qualities. This phenomenon highlights that the value of real estate is not solely dictated by the property's state but is also influenced heavily by external circumstances.

Other terms like depreciation typically refer to the loss of property value over time due to wear and tear, while market fluctuation encompasses general changes in property values due to supply and demand dynamics. Desirability loss would indicate a reduction in demand for certain features of properties, but it doesn’t specify a direct external cause, making external obsolescence the more precise term in this context.