What can be concluded about functional obsolescence in a property?

Functional obsolescence refers to a decrease in a property's value due to outdated features or design that do not meet current market demands or buyer preferences. This type of obsolescence can occur in both older and newer properties, as it is often related to shifts in what buyers find desirable. For example, a home that lacks modern amenities or has a layout that is no longer appealing may experience functional obsolescence, even if it is relatively new.

The recognition of buyer preferences is critical because these preferences evolve over time due to factors like lifestyle changes, technological advancements, and shifts in demographic trends. A property that might have been considered ideal a few years ago could face obsolescence as buyers increasingly favor open floor plans, energy-efficient features, or smart home technology.

While functional obsolescence can certainly influence valuation, it is not necessarily "necessary" for price valuation, nor does it solely pertain to older homes. Additionally, it certainly impacts property value rather than having no effect at all. Therefore, the conclusion regarding changes in buyer preferences directly ties to the concept of functional obsolescence and highlights its significance in real estate.