A residential building located near a junkyard may lose value due to which form of obsolescence?

A residential building located near a junkyard may experience a decrease in value due to economic obsolescence. This form of obsolescence refers to a reduction in property value caused by external factors that are beyond the control of the property owner, such as undesirable changes in the surrounding area. The presence of a junkyard can signal decreasing desirability and demand for homes in that vicinity, leading to a lower market value for the property.

Economic obsolescence often results from issues like noise, pollution, unattractive views, or lowered quality of life in the neighborhood, which can deter potential buyers or renters. In contrast, physical obsolescence pertains to the deterioration of the property's physical condition, functional obsolescence relates to design or layout issues that affect usability or marketability, and environmental obsolescence pertains more specifically to any detrimental impact caused by environmental conditions rather than external economic factors.