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Thu January 11, 2007 www.edmontonsun.com
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- k8 i) F/ P& m% v) z6 DThu, January 11, 20072 N$ u+ C& {4 s P
) u5 `/ d+ H7 D) p! T7 O- S# CPrice is still rightEdmonton Real Estate Board president expects a 15% climb in 2007
0 T9 _9 N8 v! c9 [9 U9 ?2 ~By NEIL WAUGH, EDMONTON SUN
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They're changing the guard down at the Edmonton real estate palace. % `9 S( ?) O0 \* s
5 e7 ~1 k7 \$ ^3 E9 xMadeline 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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- t3 S9 A3 n$ [3 f, S$ K& w& r% QBut first, the EREB president's bold predictions and fearless forecasts.
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9 g: K3 `* X f+ bDon'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%. % j6 H, ^ \9 B/ ~/ u6 g2 _
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7 s* }% k. \0 x# _2 B"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." 7 e5 Q# I/ ^, t8 }2 y: F" X. U8 \" S
8 z/ f+ \9 V/ U# FShe 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. 1 {% S* m, q. C/ v0 C$ a. z+ K
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"There just won't be enough houses to sell," she sighed. ; K4 E3 Z/ v2 g3 H6 M
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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. 4 n- i! ]# q2 F* E
" [4 s: b" F q1 i* V"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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, v1 i/ A! @# A$ CStill, 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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8 r+ i4 h4 E6 C. f$ z7 G"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. 3 K _/ o+ S; Y# \, _ y# b
+ t5 [0 m0 v. ^& q8 g2 ?" i w$ f, P"There are too many shortages in the system," he shrugged. + c* A8 l% i% F- @% h3 k0 R
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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%. + j0 U& I& E; }# @# o
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NO PRICE BOOM REPEAT
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+ {7 s% I5 j7 }8 L0 s4 @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. 0 o: O) D# M/ M. t
; v, n7 d2 N+ }" AOver 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. # H/ k0 J5 a, [2 S
7 l7 y2 W0 V/ U! _- \# r% h* n+ I' B"Our growing presence in the marketplace is having a strong impact on the competition," Holowach winked. & F0 X! Z/ m: x2 A6 Z& ]: y( }
6 K5 `( B6 c! [% h8 }- LSo strong that the Alberta Real Estate Association launched a complaint with Alberta Government Services claiming ComFree was bending the truth about its market share. ( a% h! W* Q( l
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Yesterday ComFree was still claiming 30% share of the residential market. And "commissions saved" of $82 million from his sell-it-yourself operation. Which, of course, is what the battle is really all about. + P# W0 a6 e: q2 x- ~* v- a! T
: ^0 D+ p- S. J7 p" H2 A"We do 95% of the sales in the real estate market," Pratt countered.
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* N$ D: D) o2 s! ^! fLet the good times roll.
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7 H9 u" w1 W% K6 QPrevious story: Bottom Line' F( |' V' e" z0 `9 q8 K5 m9 B* [
Next story: Building permits hit record& r7 q6 U4 Q V7 ~3 N# N- r# q; D# v
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