South Dakota Certified Appraiser Assessor (CAA) Practice Exam

Economic obsolescence refers to a reduction in property value due to external factors that are beyond the control of the property owner. When considering incurable economic obsolescence, we focus on circumstances that cannot be easily remedied or reversed.

Being near an airport can negatively affect property values due to noise pollution, air traffic, and other factors associated with proximity to such a facility. This type of economic obsolescence is often regarded as incurable because the external impact of being close to an airport is something that the property owner cannot change. Unlike issues like poor property management or obsolete building designs, which could potentially be addressed through renovations or management improvements, the location itself in relation to an airport is fixed.

In this context, high maintenance costs and poor property management are usually categorized as curable obsolescence because they can often be remedied through improved management practices or investments in maintenance. Similarly, obsolete building designs can potentially be updated or renovated to meet current market demands, making them curable as well. However, the challenge with economic obsolescence arising from external factors such as nearness to an airport emphasizes its incurable nature, solidifying it as the correct answer in this scenario.