Real Estate Functional Obsolescence
Particular items may become functionally obsolete when they do not function in the manner that they did when they were created, or, are no longer fuctioning in their intended purpose. This may be due to natural wear, or due to some intervening act. A good example is turning a garage into a game room, thereby losing the garage!
Products which naturally wear out or break down may become obsolete if replacement parts are no longer available, or when the cost of repairs or replacement parts is higher than the cost of a new item. Appliances so old in a kitchen that "parts" are no longer available for the item, is a good example of this. When this occurs, the home owner is usually way past needing to replace those appliances.
Having the washer/dryer in 1 of the bedrooms!
When people do these things, it is way past "needing to move." When they try to make (out of the existing rooms) the things they now need, they make their home undesirable to sell in the future.
Nobody has ever said to me "please find me a 3 bedroom home where there is no longer a garage but another room in its place." Or "be sure and find me a home where I can put the washer & dryer in the bedroom." Or "I sure don't mind having a bath where part of the room has been made into a closet."
Those are all examples of "functional obsolescence."
When homeowners do these things to their property, they in fact bring the "value" down and make it harder to one day, sell!