Functional obsolescence is primarily due to which of the following factors?

Functional obsolescence refers to a reduction in the value of a property due to the current design or layout of the structure being less desirable compared to current market standards or needs. This can stem from poor design elements, such as awkward floor plans, lack of modern amenities, or insufficient space allocation for current use. As preferences change over time—like homeowners increasingly wanting open floor plans or more efficient layouts—properties with outdated designs become less appealing to buyers or tenants, leading to a decrease in marketability and valuation.

Normal wear and tear represents physical deterioration rather than functional obsolescence, which addresses how a property's design can fail to meet contemporary expectations. Additionally, poor location and adverse neighboring property uses relate more to external factors affecting value rather than the internal functional characteristics that define obsolescence. Thus, the crux of functional obsolescence lies in how a property's design fails to serve its intended function effectively or meets modern standards.