What is the term for a property’s loss of value due to various economic or functional factors?

The term that specifically refers to a property’s loss of value due to economic or functional factors is obsolescence. Obsolescence can occur in various forms, such as physical, economic, or functional obsolescence, each indicating different reasons for the reduction in value. For example, physical obsolescence relates to deterioration or wear and tear, while economic obsolescence often involves external factors like changes in local market conditions that negatively impact the property's desirability.

In the context of real estate, understanding obsolescence is crucial for property assessments and valuations. It helps real estate professionals identify potential issues that could affect property values, ensuring that buyers, sellers, and investors are fully informed of market trends and property condition.

The other terms have distinct meanings; depreciation generally refers to the reduction in value of assets over time due to wear and tear and is not limited to real estate. Amortization pertains to the process of paying off a loan over time through scheduled payments and doesn't directly relate to property value loss. Appreciation refers to an increase in property value, which is the opposite of what the question seeks to define. This distinction underlines why obsolescence is the most appropriate term in the context of value loss due to various factors.