What does the term "curable depreciation" signify?

Curable depreciation refers to a type of depreciation that can be remedied through repairs or improvements that are financially reasonable. This concept is significant in the appraisal process, as appraisers assess the cost effectiveness of restoring value to a property by making necessary improvements. For instance, if a property has worn-out features that can be replaced or updated at a cost that is less than the increase in value they would bring, this depreciation is considered curable.

In contrast, the other options represent different forms or aspects of depreciation. Depreciation from market conditions is often referred to as external or economic depreciation, which is beyond the homeowner's control and not something that can be easily repaired. Irreversible depreciation suggests a permanent reduction in property value, typically due to factors such as age or external influences, which cannot be remedied through improvements. Depreciation occurring in newly constructed properties is also not classified as curable since new constructions typically should not have significant depreciation compared to older properties, unless issues arise from construction flaws or design decisions.

Understanding curable depreciation helps appraisers and property owners identify opportunities for value enhancement, making it a critical concept in real estate assessments.