What is the term for the loss of value due to physical wear and tear over time?

The term describing the loss of value due to physical wear and tear over time is physical deterioration. This concept refers specifically to the decline in the condition of a property caused by aging, weathering, or damage. As buildings and properties age, they experience various forms of wear such as peeling paint, rust, or structural issues, all of which contribute to a decrease in their overall value and marketability.

Physical deterioration is distinct from other types of obsolescence. Economic obsolescence pertains to a decline in property value due to external factors, such as changes in the local economy or neighborhood. Functional obsolescence refers to a decrease in desirability or utility of a property due to design flaws, outdated features, or inefficiencies that are inherent to the property itself. External obsolescence, on the other hand, is when external factors negatively impact the value of property, such as environmental issues or changes in zoning laws.

Understanding these distinctions is crucial for real estate professionals when assessing property value and its determinants. By identifying and addressing physical deterioration, property owners can better maintain their investment and potentially enhance resale value.