Woodvale Fire Sale

#1 Penny Lane 

Woodvale

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!!)