Money Math:  Percentage of Appreciation and Depreciation are NOT Equal

It's a good thing when your home appreciates by 10%.  When a $250,000 home appreciates by 10% it's value increases to $275,000.

But what happens when a home depreciates by 10%.  Are you back where you started?  No.  A percentage price increase is always less than the same percentage price decrease.

Take the $250,000 home that appreciates to $275,000 because of a 10% appreciation rate.  If the home depreciates from $275,000 by 10% it's value has fallen by $27,500 to $247,500.

In fact, a price drop of 9% erases a previous appreciation of 10%.  And a price drop of just 16.66% eliminates a previous appreciation of 20%.

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