A house has depreciated because of poor maintenance, including issues like worn floors and repairs needed on windows. This is an example of which type of depreciation?

The situation described highlights how the physical condition of a property impacts its value. In this case, the house has depreciated due to issues arising from poor maintenance, such as worn floors and necessary repairs on windows. This directly correlates with physical depreciation, which refers to the loss in value of a property due to physical wear and tear, deterioration, or obsolescence that affects its structural integrity or overall condition.

Physical depreciation can stem from a variety of factors, including age, neglect, and environmental wear. In this example, inadequate maintenance has led to a decline in the physical quality of the house, resulting in a decrease in its market value. This understanding helps differentiate it from other types of depreciation, such as functional, which relates to outdated design or layout; external, which is influenced by outside factors affecting property value; and economic, which pertains to broader market conditions. Thus, recognizing physical depreciation is crucial for appraisers when assessing property value and its associated damages.