Question of the Day

The Seddon family purchased the largest and most expensive house in a new subdivision. Five years later, when they were ready to move, they discovered the monetary value of the home had gone up proportionately less than the other houses in the neighborhood. This phenomenon is an example of the principle of:

Explanation

The regression principle is the reason people are cautioned against owning the most expensive house in the neighborhood. It's an observation of the fact that lower priced homes (and commercial buildings) have a much greater downward pull on the value of higher end properties than the other way around.

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