What is "depreciation" in property appraisal?

Depreciation in property appraisal refers specifically to the decrease in property value caused by a variety of factors over time. This can arise from physical deterioration, where the property itself may suffer wear and tear, or from external factors such as changes in the surrounding area, economic conditions, or shifts in market demand. Understanding depreciation is essential for appraisers as it directly affects the assessed value of a property. This assessment can impact property tax calculations and investment decisions.

The other options describe concepts related to property but do not accurately capture the definition of depreciation. An increase in property value, whether over time or through neighborhood changes, does not pertain to depreciation. Similarly, while assessing property taxes is an important role of appraisers, it is not synonymous with the concept of depreciation.