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/ g* A1 q- m- o* H' I* ZThu, January 11, 20072 `" d& l" N2 o/ |
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 20070 a9 ?: z* z( J
By NEIL WAUGH, EDMONTON SUN: S7 P5 x7 Q( h1 j" j, t
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They're changing the guard down at the Edmonton real estate palace.
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& @0 q6 q) r yMadeline 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. - r: H' h! r* G0 y5 {
; ?/ {' j4 U0 z. u+ j3 MBut 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%.
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'CONTINUED DEMAND'
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3 c& y" q& {6 p- d"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." & V) R0 t4 T" r
; O' P/ h2 g' |! I, AShe 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. / k. N/ i0 L2 O5 X& ~$ C
7 ^7 p0 Q+ H, F( J0 a0 h* d Y"There just won't be enough houses to sell," she sighed.
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( ^7 ]# c; h" q- }$ GCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting. 0 t" g( J+ `$ J% L) f
! l" T2 U1 U3 X- p9 Y% S"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."
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Still, 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.
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5 D) o6 l6 N3 V" |% f6 y"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.
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"There are too many shortages in the system," he shrugged. # I' d. u' T4 q$ n4 |
( a3 n& \+ k+ i. z# U"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. ' E8 m! r4 E' x# U
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NO PRICE BOOM REPEAT
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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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, [" }! K& l( h' B# W9 ?/ cExpect 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. ! z$ @0 A! F K9 ]/ c
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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.
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His 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. ) n5 s! l& r3 X( r& {; W1 L
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"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. 2 x1 _# s; `. Q3 i' O! T, \
/ x* l; i" X. ~) d, \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.
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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. . ?8 u' i/ ^* S6 V1 R; V5 e* p
% V' j9 M2 L% q) C- }7 M"We do 95% of the sales in the real estate market," Pratt countered. 7 V2 H" |2 Z% W0 X- h8 G, O" E
# T; a2 V' L2 G8 zLet the good times roll. ; N" C+ c, x; V. `' b4 `
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Previous story: Bottom Line
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