Saturday, September 10, 2011

Wishful thinking in Woodvale

4 Olsen Court, Woodvale, WA 6026 

Sales History

Currently Listed for $1,2000,000 to $1,300,000
(Aug  2011)

Listed April 2011 - Aug 2011 for $1,350,000 No Sale Withdrawn From Market
Bought by current owners 2000 for $545,000
Previously Sold 1996 for $480,000

Let me start by saying there is nothing wrong with this house in fact it is great. What I question is the vendors price expectations. 

Perhaps it is unfair to single out this single vendor, but this is just a typical example of our property market in general.

Property listed April 2011 for $1.350 mil well marketed , open by invitation only for the first few weeks because no doubt the agent & vendors thought it would sell without pesky buyers trudging through their house.

Home then opened several times but no buyers prepared to pay vendors asking price.

Property is now listed again after having been rested for a whole 4 weeks. Vendors have spent $3-$5,000 with the first agent trying to get $1.3 mil & can now look forward to spending another $3-$5,000 & 4 months with another agent to get $100,000 less? 

At first glance it would appear the house is well priced when compared to other overpriced houses currently on the Perth property market, if you are buying & selling in the same market it can make little difference so you may wish to consider the house at around it's current pricing.

However a common sense approach to valuing this house puts a completely different value on it.
Applying CPI & Wage increases to determine today's price:

     1996 price ( $480K ) + CPI/ Wages Growth =  $710,000 
     2000 price ( $545K ) + CPI/ Wages Growth =  $765,000

I have no doubt that somewhere out there there is a "GREATER FOOL" who will pay in excess of $1 million for a property that is actually worth less than $800,000. 

Just don't be that FOOL paying  too much in a falling market.

1 comment:

  1. I had a look on REIWA before work today (29th November 2011). Sure enough 4 Olsen Court is still there. The asking price is now $1.2 to $1.25 million. So they've reduced their mid range "expectation" by $25,000. But 3 months down the track they apparently still are not getting offers. "Sunk in Sorrento" has been forced to significantly reduce the price, will "Wishful thinking" do the same? Or will they simply stay put?