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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%.