Final answer:
A house loses value due to changing tastes and preferences, which is referred to as functional obsolescence. It is distinct from physical deterioration and economic obsolescence, often influenced by factors such as economic cycles, demographic changes, and phenomena such as planned obsolescence.
Step-by-step explanation:
A house loses value because it no longer appeals to changing tastes, which is called functional obsolescence. This occurs when a property is no longer desirable because its layout, design, or features have become outdated and do not meet current market expectations. It contrasts with physical deterioration, which is the wear and tear that buildings naturally experience over time, and economic obsolescence, which refers to loss of property value due to external economic factors, like changes in a neighborhood's economic conditions that could lead to capital flight and demographic transitions affecting housing demands.
Factors such as the Great Recession and housing bubbles can cause major dysfunction in the economy affecting the real estate market, as explained within the functionalist perspective. Additionally, the concept of planned obsolescence is relevant here, describing how products are designed with a limited useful life to encourage consumers to purchase replacements, like with the nylon stockings example. This practice influences consumer behavior and can impact the longevity and desirability of various products, including houses.