Which is an example of external obsolescence?

External obsolescence refers to a loss of value that is not due to factors within the property itself but rather from external factors in the surrounding environment. Being located near a noisy highway is a prime example of external obsolescence because the noise can detract from the enjoyment of the property and affect its market value, even though the property itself may be in perfect condition.

This type of obsolescence is often outside the control of the property owner and is related to factors like location, environmental conditions, and external influences that can impact property desirability. For example, commercial developments, undesirable neighboring properties, or environmental hazards can also contribute to this loss in value.

The other options involve issues that are inherently linked to the property itself—such as wear and tear from physical use, outdated plumbing, or the conditions of the property itself—these are typically classified as physical deterioration or functional obsolescence rather than external obsolescence.