What does "depreciation" signify in property assessments?

Depreciation in property assessments refers specifically to a decrease in property value that can be attributed to various factors. This concept encompasses both physical deterioration and external influences, such as changes in the neighborhood or economic conditions that negatively impact property values. In the context of property assessments, understanding depreciation is crucial because it helps in accurately determining the current market value of a property compared to its historical valuation.

This understanding is essential for assessors as they evaluate properties not only based on their physical attributes but also considering the external environment and its overall impact on value. Factors contributing to depreciation might include an increase in crime rates, an economic downturn, or the presence of undesirable entities nearby. Taking these aspects into account ensures that assessments reflect realistic market conditions and property worth.