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Thu January 11, 2007 www.edmontonsun.com4 c/ s4 J; T4 B# k
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Price is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
# ^. G. W; s8 i% z0 eBy NEIL WAUGH, EDMONTON SUN$ K9 `3 F. V$ ?( H7 }' B7 \
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They're changing the guard down at the Edmonton real estate palace. $ Q u3 h) n4 C% ^: r4 |) |
: S5 W7 k" i3 i$ T9 tMadeline 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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1 v( `8 R- }% l9 N* fBut first, the EREB president's bold predictions and fearless forecasts. 9 m' J+ Q- x/ {" T' x8 ]& X
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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%. 4 d3 ^3 s6 C4 h+ D# a# U+ Z# J
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& n9 ~* C' q3 J"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." h8 v9 c$ R; u/ M! a
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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.
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"There just won't be enough houses to sell," she sighed.
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5 J4 K; c" o. d* ]0 `) lCanada Mortgage and Housing Corporation senior analyst Richard Goatcher was also talking a good-news-bad-news scenario at the board meeting.
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# s6 N% t" m/ i1 @0 ?/ N"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." ( F, p6 c8 P) o: p" M$ w5 C4 D
+ a8 X8 @, m0 g1 ], G* s5 lStill, 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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"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.
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4 \/ I8 o% r6 u' w1 `3 c"But it's still going to be very, very strong," he quickly added, with the average new-home selling price ramping up by 20%. . P) Z* r q- B& ~
8 U, R3 y7 P% q `9 p$ G- HNO 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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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. 2 n' [4 @1 N. y, E
; i! G- n4 q) W6 |0 ]$ W/ P6 wOver 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. " W: f$ c, U: K, x
2 c- U2 A' ^8 `: w6 q1 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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2 Q Y( i2 ~8 @7 m3 \( m"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. / H7 X t$ v2 A) a; I# _
% E& a) [3 _& O$ jSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. 8 t: U. d. I' ]% m
& K; C: x6 K/ N4 L) B4 R! HYesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about.
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"We do 95% of the sales in the real estate market," Pratt countered. " x M7 Q" h; ~; ?6 r
/ V5 S4 x$ J% P6 k7 oLet the good times roll. , M$ \! q3 B. ] K7 S' M7 P+ Y
+ y# j1 ~- o% T# p! c3 D; sPrevious story: Bottom Line- s* d0 ]3 |$ ]/ L: V
Next story: Building permits hit record' j) y& H/ l' A
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