What is considered to have a significant impact on property values in a neighborhood?

Economic obsolescence is considered to have a significant impact on property values in a neighborhood because it refers to a decline in property value due to external factors that affect the economic desirability of the area. This type of obsolescence can arise from various sources, such as changes in the local economy, shifts in employment opportunities, or developments that negatively affect the neighborhood, such as increased crime rates or the construction of undesirable facilities nearby.

These external factors can lead to decreased demand for properties, which in turn can drive down property values across the neighborhood. When the economic environment is unfavorable, the effects are often widespread, impacting not just individual properties but also the overall market conditions in the area. Consequently, appraisers must take economic obsolescence into account when assessing property values, as it can be a significant determinant of value in real estate.

While other factors like functional, physical, and environmental obsolescence can also affect property values, their impact is typically more isolated or specific to individual properties rather than being as pervasive and influential as economic obsolescence across a neighborhood.