What does Economic depreciation primarily concern in property evaluation?

Economic depreciation primarily addresses the reduction in property value due to external factors that affect its marketability, rather than the physical condition of the property itself. This concept recognizes that various market conditions can influence how much a property is worth, such as changes in the local economy, shifts in demand or supply within the housing market, or the impact of broader economic trends.

While wear and tear of physical structures does relate to the overall value of a property, that specific aspect falls under physical depreciation rather than economic depreciation. Similarly, improvements made to the property or changes in building codes could enhance property value or alter potential uses, but these factors do not directly relate to the external economic influences that drive the market value downward. Economic depreciation focuses on how external factors rather than intrinsic property characteristics can influence value.