Direct answer
What does Depreciation mean?
A loss in property value from physical deterioration, functional obsolescence or external obsolescence in appraisal.
Exam cue: Identify the source of value loss and whether the condition is curable or incurable when the question supplies enough facts.
What does it look like in a question?
New York example
A poor floor plan creates functional obsolescence even though the structure is well maintained.
Common exam trap
What should you not confuse it with?
Appraisal depreciation is not the same calculation as income-tax depreciation.
Related valuation terms
Sources used3 references with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
- Real Estate Salesperson 77-Hour CurriculumNew York State Department of StateSupports: Exam scopeSection: Subject 8, Valuation Process and Pricing Properties
- RPS Glossary of TermsNew York State Department of Taxation and FinanceSupports: DefinitionSection: Valuation and income approach definitions
- Real Estate License Law, March 2026New York State Department of StateSupports: DefinitionSection: Department of State reference glossary entry for Depreciation
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Put the term back into its full subject.
A definition helps with recall. The subject guide shows how the rule interacts with documents, scenarios, calculations and practice questions.