What is the term for the loss of value that accompanies a property due to adverse external factors?

The term for the loss of value that accompanies a property due to adverse external factors is regression. This concept refers to the principle that a property's value can decrease because of negative circumstances in the surrounding area, such as an increase in crime rates, a decline in the quality of nearby schools, or the construction of an undesirable facility nearby. When such external factors negatively influence the environment and appeal of a property, it can lead to a decrease in demand, which ultimately affects its market value.

In contrast, objective value refers to a more neutral assessment of property worth based on tangible factors, while plottage deals with the increased value that results from combining two or more parcels of land into one larger parcel. The principle of substitution describes how properties are appraised based on the cost to purchase a substitute property that offers similar utility, which does not pertain directly to the loss of value due to external factors.