What term describes a home that has received more improvements than necessary?

The term that describes a home that has received more improvements than necessary is functional obsolescence. This refers to a situation where a property's design or improvements are no longer efficient, suitable, or aligned with the preferences of potential buyers, often because the enhancements exceed what is typical in the market or context.

For example, if a home is heavily upgraded with luxury features that far surpass the standard offerings in the surrounding neighborhood, it could lead to a mismatch in buyer expectations and market prices. This over-improvement does not necessarily enhance the property's value in the eyes of buyers, leading to diminished appeal or usability; thus, it illustrates functional obsolescence.

Other terms do not fit this scenario in the same way. Physical depreciation pertains to the wear and tear or deterioration of a property over time, typically associated with maintenance issues. Economic obsolescence refers to external factors that adversely affect property value, such as changes in the neighborhood that make it less desirable. Market overpricing suggests that the price set for the home exceeds its market value due to various reasons but does not specifically address the nature of the improvements made to the property.