What is an essential characteristic of physical depreciation in appraisals?

Physical depreciation is specifically related to the physical condition and usability of a property as a result of wear and tear over time. It reflects the loss in value due to the physical deterioration of the property itself, such as damages from neglect, lack of maintenance, or environmental factors impacting the structure. In this context, repairs needed from neglect directly align with the concept of physical depreciation, as it signifies that the property's physical attributes are deteriorating, thus reducing its overall value.

On the other hand, the other options relate to different types of depreciation. Obsolescence due to market changes refers to economic factors affecting property value rather than its physical condition. Changes in neighborhood dynamics involve external influences that can affect property value, but these do not directly pertain to the physical state of the property. Functional inadequacies relate to how well a property's features meet current market demands and user expectations, which is more about design and functionality than physical condition.

Thus, the focus on repairs needed from neglect accurately encapsulates the essence of physical depreciation in appraisals.