What term describes the loss of value due to a property's function or appearance going out of style?

The term that describes the loss of value due to a property's function or appearance going out of style is "functional obsolescence." This concept pertains to situations where a property no longer meets the demands or preferences of the current market. For example, a home with outdated design features, such as an inefficient layout or obsolete amenities, may suffer from functional obsolescence, resulting in reduced market appeal and value.

Functional obsolescence can occur even in well-maintained properties, as design trends and buyer preferences change over time. This differs from physical obsolescence, which relates to the physical deterioration of a property due to age or wear and tear, and external obsolescence, which involves factors outside the property, such as neighborhood decline or changes in zoning laws. Economic obsolescence similarly refers to a loss in value caused by external economic factors rather than the property's own characteristics. Therefore, functional obsolescence specifically highlights how changes in style and functionality can impact a property's marketability and financial worth.