If a house is located in a neighborhood suffering from smoke and dust from factories, the house is likely to have what type of obsolescence?

The situation described in the question clearly points to economic obsolescence. This type of obsolescence occurs when a property's value is affected by external factors beyond the property owner's control. In this case, the smoke and dust from nearby factories negatively influence the desirability and market value of the house.

Economic obsolescence typically arises from unfavorable conditions in the surrounding area, such as environmental issues, crime rates, or changes in neighborhood demographics, which lead to a decrease in demand for properties within that location. Therefore, the presence of air quality issues from factories serves as a clear example of how external factors can diminish a property's value, categorizing it under economic obsolescence.

While other types of obsolescence such as functional and physical deterioration relate more to issues within the property itself (like outdated designs or structural damage), economic obsolescence stems from external environmental factors that affect the marketability and valuation of the property.