PSI New Jersey Real Estate State Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the New Jersey Real Estate Exam. Ace your test with comprehensive multiple-choice questions. Each question includes detailed explanations and hints. Start studying today and boost your confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of obsolescence is related to changes in market conditions or external factors?

Functional obsolescence
Economic obsolescence
Physical obsolescence
Structural obsolescence

The correct answer is: Economic obsolescence

Economic obsolescence, also known as external obsolescence, refers to a decrease in property value caused by factors outside of the property itself. This can include changes in local market conditions, such as economic downturns, shifts in demographics, or the introduction of new zoning laws that affect property desirability. Factors like increased crime rates, reduced demand for certain types of properties, or proximity to undesirable features like highways can all contribute to this type of obsolescence. In contrast, functional obsolescence pertains to the property's outdated features or designs that make it less desirable, physical obsolescence refers to the deterioration of the property's physical structure over time, and structural obsolescence relates to issues with the building's structural integrity or design flaws. These other types of obsolescence focus on internal property characteristics or physical conditions rather than the external market influences that characterize economic obsolescence. Thus, the answer accurately identifies the influence of external factors on property value.