Which term describes a decrease in property value due to factors like age or outdated features?

The term that specifically refers to a decrease in property value due to factors such as age or outdated features is functional obsolescence. This concept encompasses issues that arise from a property no longer meeting the needs or preferences of typical buyers or tenants, often due to changes in design trends or residential features that are now considered outdated. For instance, a home with a single bathroom in an area where multiple bathrooms have become the standard may experience a reduction in value because it lacks functional utility that buyers expect.

In contrast, while other terms relate to property value decline, they address different aspects. Market decline pertains to broader economic factors affecting local real estate markets rather than specific property features. Physical deterioration focuses on the tangible wear and tear of a property over time, such as structural issues or lack of maintenance, rather than the functional aspects of design. Appreciation refers to the increase in property value over time, which is contrary to the decrease highlighted in the question. Thus, functional obsolescence accurately captures the essence of value reduction due to outdated features and changing buyer expectations.