The Luxury Market --- homes over $1 mil --- got hit hard when the real estate market of 2003-2006 sprung a leak. By 2007, we were painfully aware that market was in deep trouble, and it continued to decline until late 2011. We thought the market of te early to mid 90s was bad, but this was frightening. As of early 2012, we started seeing some improvement. Not in prices, mind you, but in activity which is always a sign of consumer confidence --- something we haven't seen for years, particularly in the Luxury Market. The problem, as I see it, is with homes over $2.5 mil. It's not that they're not selling at all, but that so few o them are selling, and that they're selling for far less than their original list prices. We've seen homes in Franklin Lakes sit languishing on the market for 3+ years before accepting a contract. There's not much question that those Sellers were kicking themselves for (1) so seriously overpricing their homes, and (2) not attempting to negotiate a price both Seller and Buyer could have lived with. As my divorce attorney once told me, "The way I know I've gotten the divorce agreement right is when he thinks he got screwed, and she thinks she got screwed. Then I know it's perfect!" I think that dynamic can be applied to home buying. The problem is, when you're talking about "losing" hundreds of thousands of dollars, it's not so easy to swallow. But the greater problem is this: these homes were never worth what the Sellers thought they were, so they weren't so much "losing" money as being realistic.
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