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Thu January 11, 2007 www.edmontonsun.com
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Thu, January 11, 2007
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
3 I. Z% c( k% @* E% EBy NEIL WAUGH, EDMONTON SUN
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( B0 }% q- V. S0 F# EThey're changing the guard down at the Edmonton real estate palace.
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$ z/ W8 E5 X$ g/ e+ k& cMadeline Sarafinchan is out. Carolyn Pratt is taking over the Edmonton Real Estate Board president's gavel - the kind of blunt instrument that some realtors, I suspect, would like to use on ComFree Edmonton upstart Travis Holowach. More on that later.
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/ i* V$ v% [2 n0 z! ]But first, the EREB president's bold predictions and fearless forecasts.
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Don't expect a repeat of last year's housing boom where condo and single family dwelling prices spiked an incredible 52%. Pratt is now calling for a more modest increase of 15%. - k7 `8 K" E5 G7 l: G, {2 H
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"We feel the increase will come because there will be continued demand, consumer confidence, a very robust economy and low interest rates," Pratt whooped at the EREB's New Year's kick-off conference at the Westin. "All the factors are there for another terrific year." + P3 M' q4 ~: L* k
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She predicted that the total number of residential sales isn't expected to increase in 2007 - despite thousands of pot-of-gold seekers still flocking to the capital region from across the country as Ontario continues to sputter. & A) c& h1 @& c" q3 m0 S
1 o4 g; h3 [* L. r9 r: I7 K"There just won't be enough houses to sell," she sighed. / g: J6 ^$ m% F5 D) a0 b6 `
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Canada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. 0 F8 t `+ Q8 Y2 ]; H0 x6 h8 {
! j0 {# k+ M) |"The big issue is, are we going to see continued in-migration into the city with the volumes we had last year?" Goatcher said. His expectation is "somewhat less." ) q5 F: {- k+ n! b
' ~7 b( ^% X! O3 X5 ^3 TStill, total new-house starts will be "fairly similar" to last year's pace. 2006 turned out to be a record year. So was 2005. But Goatcher is predicting a 5% decrease in house starts. . E5 C% a P X) b0 i
% s' f4 s3 E4 S: L; ]"A lot of it is due to capacity issues," he said. Developers are running out of serviced lots in some areas. Some homebuilders "got a little overstretched" during last year's house-building frenzy. ( b& R9 @& t2 u8 U: O
/ C0 F" U$ j1 ^0 m$ }+ y"There are too many shortages in the system," he shrugged.
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"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%.
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He also doesn't see a repeat of the 2006 price boom in the resale market, which he described as "unsustainable."
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Expect a more gentle 10% increase - mainly because many potential buyers are now being priced out of the market - even with zero down payment and 40-year mortgages. 7 G" B+ ~& Q5 A% |
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Over at ComFree Edmonton, president Travis Holowach was also celebrating what he described as a "steaming red hot" real estate market, and another "record-setting" year for his commission-free real estate service. 0 n6 }( q: a- H& ?6 N0 w' ?/ O
: _9 f6 b3 @0 z- \* K. _6 ZHis 2006 wind-up report shows 4,375 total sales and 5,721 new listings, up 74% from 2005 - clearly sucking up a lot of the inventory that would otherwise have gone to an EREB realtor.
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. , X9 Y4 ?' ]: q7 v5 \5 W
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So strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. : |0 h3 \5 l6 H& C
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. & Z$ V9 p) f9 E5 ?
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"We do 95% of the sales in the real estate market," Pratt countered. 1 G' G6 s/ j0 K+ C* K9 b6 {2 p
7 Y' W l7 O* r3 V+ m) cLet the good times roll. , |" \! c# a/ A1 ^5 T
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Previous story: Bottom Line) U/ [, Y+ z. P
Next story: Building permits hit record @) C- }6 a& c3 O' E
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