An oversupply of properties in a neighborhood is an example of which type of obsolescence?

An oversupply of properties in a neighborhood is classified as economic obsolescence because it relates to external factors that affect the property's value. Economic obsolescence occurs when there are market conditions or external influences, such as an abundance of available properties, that diminish the value of real estate. This situation indicates that there is a surplus of supply over demand, which often leads to a decrease in property prices.

Economic obsolescence is distinct in that it is typically not related to the property itself, but rather to broader market conditions. This contrasts with other types of obsolescence. For instance, functional obsolescence refers to issues within the property that reduce utility or desirability, such as outdated layouts or features. Physical obsolescence involves deterioration due to wear and tear, and site obsolescence relates to the property's location and may include negative environmental factors. In this case, the oversupply is a clear indicator of economic influences impacting property values, making economic obsolescence the correct categorization.