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August 28, 2007
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: a. x) c: G7 }$ n9 ^Buyer's marketHome sellers forced to slash prices
& }3 B* y" w8 e: q1 W# X/ s1 X M" dBy FRANK LANDRY, CITY HALL BUREAU
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Home sellers are slashing their asking prices by tens of thousands of dollars as Edmonton's once sizzling housing market continues to cool, says a city real estate agent.
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& P( P% @0 F2 L6 ]9 F2 j0 RAnd new figures from the Edmonton Real Estate Board show the vast majority of sellers are now getting less than they're asking for - a stark contrast to the bidding wars of a year ago that routinely forced buyers to pay more than the list price. 9 O; C' q8 S: {: ?) b8 l) W5 h
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"There's tons of stuff on the market. There's twice as much inventory in residential real estate today as there was a year ago at this time," Re/Max agent Abe Hering told Sun Media yesterday.
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9 d( d4 x/ b6 U8 K3 q) H1 y"If your supply mushrooms tremendously, inevitably the only product that will get consumed is the one that's best priced."
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* {* x0 [8 R) T4 t( u$ I; f: NAs a result, Hering said he routinely advises clients who've had their homes on the market for awhile to drop their asking price by 10% in order to remain competitive. On an average $417,000 single-detached home, that works out to more than $40,000.
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9 H, P- t& b4 Z6 x"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more," he said. : `( c4 o6 G, F- Z1 V, }
% i& T( g+ z. ] n5 P2 {, jJon Hall, with the Edmonton Real Estate Board, said 85% of single family homes that sold over the past 30 days went for less than the asking price. On average, the final figure was nearly $12,000 less than the seller was seeking.
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& d" K( t1 d( }7 zCondos didn't fair much better, with 79% going for less than the asking price.
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"What most realtors seem to be saying is that the sellers haven't adjusted their mindset to the new reality - that we have over 8,000 listings and that buyers have choice," Hall said.
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He said many sellers are knowingly asking for more than their home can fetch.
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"And quite frankly, the realtors are getting a bit frustrated," Hall said. 6 t6 Z# T4 E" Y
8 H0 i+ k9 `& R" j5 i% Z"The client sets the price. If the seller says, 'I want it listed $20,000 above the market price,' they've got to do it. Ten days or two weeks later, the realtor's coming back and saying, 'I told you so,' and dropping the price."
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+ A6 ?4 }( S7 Y4 K2 O2 X" Y: ]There are several theories as to why there are so many homes on the market.
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& m5 _! l( a7 u4 B* qCarolyn Pratt, president of the Realtors Association of Edmonton, said some investors are trying to dump property.
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Other people are moving into larger or smaller homes, while trying to capitalize on the market. Some sellers like to list during the summer months, she said.
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Pratt said she's also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper. # T* \( f1 O3 `1 \
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Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.
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"It seems like a lot of people are going home," said Mackie. "There's no doubt about it, it's a significant number." & S! J, [3 T& g3 o
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Hall said many sellers with homes on the market in Edmonton today won't sell.
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"It would be fair to say a lot of listings will melt. They'll just disappear," Hall said. "They'll just be withdrawn after a typical 60- or 90-day listing period."
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, M9 y8 M! m$ ]; k. w& F3 ]The Edmonton Real Estate Board recently reported there was virtually no increase in the selling price of single family residence in July. That month, condo prices went up 2.5%, while townhomes increased 1%. The figures for August are expected to be released early next month. |
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