In real estate appraisal, what does the term "functional obsolescence" generally imply?

The term "functional obsolescence" in real estate appraisal refers to a reduction in property value due to inadequacies in design or features that are no longer aligned with current market expectations or standards. This can happen when design elements or layouts become outdated, making the property less desirable to potential buyers or tenants.

For example, a home that has a very small kitchen or lacks modern amenities may be seen as less valuable compared to other properties that meet current buyer preferences for larger, more open kitchen spaces and updated appliances. Thus, the concept of functional obsolescence is directly tied to how a property's features compare with contemporary market demands and standards, impacting its overall value negatively.

While redundant structural features, increased land value from development, and the idea of repurposing property functions may relate to overall property analysis, they do not specifically address the nuances of how functionality affects value. Therefore, the focus on inadequate designs that do not meet modern market criteria squarely captures the essence of functional obsolescence.