What happens to a property’s value if it suffers from environmental nuisances like nearby factories?

When a property experiences environmental nuisances, such as being located near factories, its value is likely to decrease due to external obsolescence. External obsolescence refers to a reduction in property value caused by negative external factors that are often beyond the owner's control. These factors can diminish the desirability of the property, leading to a lower market price.

In this case, the nearby factories may contribute to issues like noise, pollution, and reduced air quality, which can deter potential buyers or tenants. As a result, the property may be appraised at a lower value compared to similar properties located in more favorable environments. This reasoning underscores the connection between neighborhood conditions and property value, highlighting how external influences can significantly impact real estate market dynamics.