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Are Your Home Sellers Losing Money, or Just Not Gaining As Much as They'd Like?
Today Bankrate ran an article telling how the rich and famous are trying unsuccessfully to sell their multi-million dollar homes. Some of them have been on the market for years with no takers.
 
Of course, there’s not a huge number of citizens who can even consider buying homes in the multi-million dollar range, so their buyer pool isn't large. But it made me think about the profits that some homeowners are still expecting today.
According to the article, Barry Manilow purchased his home for $3 Million in 1999. Then he put it on the market for $10.9 Million in 2009. Now he’s dropped the price to a paltry $7.9 Million and it still isn’t selling.
Is that price realistic?
No, not if you look at the “traditional” (pre boom) appreciation.
We used to believe that on average a home would appreciate 5% per year. If we applied that figure to a $3 Million price tag, that home today “should” be worth $5.4 Million. But of course, he’s still looking at what it was “worth” just before the bubble burst.
Since he once believed he could sell for $10.9 Million, he probably feels like he’ll be losing money if ... more

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