Mandy Moore — who, quite frankly, we can't think about without humming the chorus to "Candy" — has sold her long-time home in L.A. for just under $3 million. Moore purchased the Mediterranean-style abode 14 years ago for a mere $1.7 million. The 5-bedroom, 5-bathroom estate in L.A.'s super-hip Los Feliz neighborhood rests on a secluded lot and boasts its own zen garden. The listing is still up on Trulia, and can we just say....
Wow.
Just...wow.
So, can you expect your home to appreciate like Mandy's?
Well...maybe, maybe not. The average home appreciates at a rate of about 5.5% per year. So that $100,000 home you purchased last year is probably now worth $105,000. Mandy's annual rate of return was a little under 5%.
A home's "value" is only what a person will actually pay for it, so appraisals and appreciation estimations are at best a guessing game - but the people who run these numbers are very, very good at guessing. That 5.5% annual rate of return is almost a sure thing for most of us.
When you purchase a home, you are probably spending the most money you'll ever spend all at one time. It's not a situation to enter lightly. If you're doing it purely for profit, be warned - some homes do lose value, bubbles do burst, neighborhoods do deteriorate. But that's all so unpredictable!
Good advice: Only buy what you can afford, insure everything, and make investments outside of your property.
Images: Kevin Winter via Getty Images; Trulia.com