Which of the following best describes the term 'depreciation' as used in property valuation?

Depreciation in property valuation refers specifically to the decrease in value of a property over time, primarily due to factors such as wear and tear, physical obsolescence, economic obsolescence, or changes in market conditions. This phenomenon reflects the aging of a property and any deterioration that occurs, which can be either physical damage or a decline in desirability caused by external factors.

By identifying depreciation as a loss of value from wear and tear, it captures the essence of how physical condition impacts property value. This understanding is crucial for appraisers as they determine the current worth of a property, especially when it comes to assessing the impact of age and maintenance on real estate value. The other options, while relevant to the broader conversation about property value, do not capture the specific nature of depreciation as it is understood in property valuation contexts.