Which method is effective for evaluating Incurable Functional Obsolescence?

Evaluating incurable functional obsolescence is best accomplished through the sales comparison method because this approach focuses on the principle of substitution. By examining the sales prices of comparable properties that have similar functional characteristics, an appraiser can determine how much value has been lost due to deficiencies that cannot be economically corrected, such as outdated designs or inefficient layouts.

Sales comparison provides a more direct measure of how the market perceives these obsolescent factors compared to other methods. Unlike the cost replacement method, which estimates the cost of replicating a property and may not adequately account for market perceptions, the sales comparison approach reflects real market transactions and thus can illustrate the impact of functional obsolescence on property value.

The comparative market analysis, while similar to the sales comparison method, is generally less formal and may not delve deeply enough into specific obsolescence issues. The appraisal volume method is typically used in more complex appraisals often tied to mass appraisal and not for assessing individual property issues like incurable functional obsolescence. Thus, the sales comparison method provides the most relevant and effective means of evaluating this type of depreciation in value.