Decay

It takes a long time for a house to completely depreciate. Many of its structural elements have lives longer than decades. Exterior features in like roofs, siding, windows, and doors may need little maintenance for years.

Yard work left to run free may give the appearance of a property left to nature. But eradicating the growth is of little cost compared with replacing all new heating and cooling systems, water heaters and appliances. Most of these have an average life of 12-15 years. And then, of course, there are the plumbing and lighting fixtures that are often replaced for both cosmetic and functional reasons.

At each phase of putting off a replacement and trying to patch things up and get by, a debt of maintenance is created. If the property were to trade hands, a new owner might be willing to take on a few additional repairs for a concession on price. At some point (and what would that be?) the average buyer turns away. There’s too much to do. There are too many lurking money pits under the subfloor in the bathroom or behind the paneling in the lower level.

This is when the structure’s value falls to zero. The parcel will only command the price of the land it sits on, with an adjustment for the cost of debris removal. But it takes decades to get to this point. The built world is durable, and there are many opportunities for rejuvenation.