#1 Penny Lane
For Sale : $499,000
First Listed 15th April 2011 for Mid $500,000
( Realtor's Code for $550K Plus)
Discounted 17th May 2011 to $530K & again 16th June 2011 $515K - $530K
Taken off the market for 2 weeks & re-listed with a NEW AGENT @ $499,000
So what is the sad pricing history of this house?
Bought March 2006 by the current owners at the peak of the Perth property cycle for $425,000 .
However it had sold just 12 months earlier in March 2005 for just $320,000!!
So the current owners were happy to pay 33% more after just 12 months?
What were they thinking?
Why pay $100,000K more in just 12 months.
Oh that's right in 2006 like today there was a mining boom.
So it did not matter what you paid because a "Greater Fool" on a big mining pay packet
will happily pay you whatever you need them to pay you so that you can to make a tidy profit.
So what should you pay for this property?
In my opinion this property was only ever worth $245K in 2005
So the price of $320K paid then was just STUPID.
I looked at this house in 2005 as a investment & thought the asking price
was over the top it should have been $245K max
But for the sake of this exercise lets just accept that in 2005 the $320K price was the correct price.
Well the RBA says that since 2005 the CPI has gone up 18.9% & wages went up 19.5% (Roughly 3% PA) so this $320K house should be worth no more than $384K in 2011.
But if you accept my assessment that in 2005 this property was worth no more than $245K
then the 2011 price should be $294K
So either $294K or $384K But definitely NOT $499,000
The other interesting thing is, that if this property was to sell in the next 2 weeks @ the $499K price REIWA stats would show it is selling in 14 Days with a Zero discount of asking price.
But the reality will be that it took 125 days &had to be discounted by 10% (Thats if it sells!!)