In what situation would functional obsolescence occur?

Functional obsolescence occurs when a property feature becomes outdated or less useful, which means that it no longer meets the needs or expectations of potential buyers or occupants. This could result from various factors, such as changes in building codes, changes in consumer preferences, or advancements in technology that render certain features less desirable. For example, a home with only one bathroom may become less appealing in a market where multi-bathroom homes are the norm, or an older design lacking modern amenities might fail to attract buyers.

This concept directly addresses how certain aspects of a property can diminish its value or utility in the eyes of buyers. As a result, it distinguishes functional obsolescence from other forms of depreciation, which may be related to location, physical damage, or market conditions.