Which type of depreciation accounts for a property becoming less desirable due to changes in market trends?

The correct choice identifies economic obsolescence as the type of depreciation that occurs when a property's value declines due to external factors, particularly changes in market trends or economic conditions. This form of depreciation is beyond the control of the property owner and is typically influenced by shifts in the broader market environment, such as neighborhood decline, changes in zoning laws, or unfavorable developments in the area that make the property less desirable.

Recognizing economic obsolescence is crucial for appraisers because it helps in accurately assessing the property’s market value. Unlike functional obsolescence, which is related to deficiencies within the property itself, or physical obsolescence, which refers to the wear and tear of the property, economic obsolescence highlights the impact of externalities. Curable obsolescence, on the other hand, indicates that the issue can be fixed or improved upon at a reasonable cost, thereby differentiating it from situations where the decrements in property desirability are linked to external market dynamics.